Correlation Between Williams Sonoma and AerCap

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Williams Sonoma and AerCap 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 Williams Sonoma and AerCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Williams Sonoma and AerCap Global Aviation, you can compare the effects of market volatilities on Williams Sonoma and AerCap 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 Williams Sonoma with a short position of AerCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Williams Sonoma and AerCap.

Diversification Opportunities for Williams Sonoma and AerCap

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Williams and AerCap is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Williams Sonoma and AerCap Global Aviation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Global Aviation and Williams Sonoma 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 Williams Sonoma are associated (or correlated) with AerCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Global Aviation has no effect on the direction of Williams Sonoma i.e., Williams Sonoma and AerCap go up and down completely randomly.

Pair Corralation between Williams Sonoma and AerCap

Considering the 90-day investment horizon Williams Sonoma is expected to generate 10.98 times less return on investment than AerCap. But when comparing it to its historical volatility, Williams Sonoma is 20.73 times less risky than AerCap. It trades about 0.1 of its potential returns per unit of risk. AerCap Global Aviation is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  9,800  in AerCap Global Aviation on October 19, 2024 and sell it today you would earn a total of  176.00  from holding AerCap Global Aviation or generate 1.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy60.0%
ValuesDaily Returns

Williams Sonoma  vs.  AerCap Global Aviation

 Performance 
       Timeline  
Williams Sonoma 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Williams Sonoma are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Williams Sonoma displayed solid returns over the last few months and may actually be approaching a breakup point.
AerCap Global Aviation 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AerCap Global Aviation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for AerCap Global Aviation investors.

Williams Sonoma and AerCap Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Williams Sonoma and AerCap

The main advantage of trading using opposite Williams Sonoma and AerCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Williams Sonoma position performs unexpectedly, AerCap 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 AerCap will offset losses from the drop in AerCap's long position.
The idea behind Williams Sonoma and AerCap Global Aviation 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.
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Equity Valuation
Check real value of public entities based on technical and fundamental data