Correlation Between PACIFIC and Air Lease

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both PACIFIC and Air Lease at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PACIFIC and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PACIFIC GAS ELECTRIC and Air Lease, you can compare the effects of market volatilities on PACIFIC and Air Lease and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PACIFIC with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACIFIC and Air Lease.

Diversification Opportunities for PACIFIC and Air Lease

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between PACIFIC and Air is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC GAS ELECTRIC and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and PACIFIC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PACIFIC GAS ELECTRIC are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of PACIFIC i.e., PACIFIC and Air Lease go up and down completely randomly.

Pair Corralation between PACIFIC and Air Lease

Assuming the 90 days trading horizon PACIFIC GAS ELECTRIC is expected to generate 25.42 times more return on investment than Air Lease. However, PACIFIC is 25.42 times more volatile than Air Lease. It trades about 0.04 of its potential returns per unit of risk. Air Lease is currently generating about 0.05 per unit of risk. If you would invest  9,412  in PACIFIC GAS ELECTRIC on September 5, 2024 and sell it today you would earn a total of  391.00  from holding PACIFIC GAS ELECTRIC or generate 4.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.99%
ValuesDaily Returns

PACIFIC GAS ELECTRIC  vs.  Air Lease

 Performance 
       Timeline  
PACIFIC GAS ELECTRIC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PACIFIC GAS ELECTRIC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PACIFIC is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Air Lease 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Air Lease disclosed solid returns over the last few months and may actually be approaching a breakup point.

PACIFIC and Air Lease Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PACIFIC and Air Lease

The main advantage of trading using opposite PACIFIC and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACIFIC position performs unexpectedly, Air Lease can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Air Lease will offset losses from the drop in Air Lease's long position.
PACIFIC vs. Air Lease
PACIFIC vs. Boston Properties
PACIFIC vs. Bassett Furniture Industries
PACIFIC vs. Addus HomeCare
The idea behind PACIFIC GAS ELECTRIC and Air Lease pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Air Lease vs. Alta Equipment Group
Air Lease vs. McGrath RentCorp
Air Lease vs. Herc Holdings
Air Lease vs. HE Equipment Services
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

Other Complementary Tools

USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY