Correlation Between Air Lease and Aarons
Can any of the company-specific risk be diversified away by investing in both Air Lease and Aarons 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 Air Lease and Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and The Aarons, you can compare the effects of market volatilities on Air Lease and Aarons 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 Air Lease with a short position of Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Aarons.
Diversification Opportunities for Air Lease and Aarons
Pay attention - limited upside
The 3 months correlation between Air and Aarons is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons and Air Lease 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 Air Lease are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of Air Lease i.e., Air Lease and Aarons go up and down completely randomly.
Pair Corralation between Air Lease and Aarons
Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.56 times more return on investment than Aarons. However, Air Lease is 1.8 times less risky than Aarons. It trades about 0.35 of its potential returns per unit of risk. The Aarons is currently generating about -0.03 per unit of risk. If you would invest 4,168 in Air Lease on February 3, 2024 and sell it today you would earn a total of 910.00 from holding Air Lease or generate 21.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 97.73% |
Values | Daily Returns |
Air Lease vs. The Aarons
Performance |
Timeline |
Air Lease |
Aarons |
Air Lease and Aarons Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Lease and Aarons
The main advantage of trading using opposite Air Lease and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Aarons 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 Aarons will offset losses from the drop in Aarons' long position.Air Lease vs. Ryder System | Air Lease vs. Avis Budget Group | Air Lease vs. FlexShopper | Air Lease vs. Global Ship Lease |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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