Correlation Between Macquarie Infrastructure and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both Macquarie Infrastructure and AerCap Holdings 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 Macquarie Infrastructure and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Infrastructure Co and AerCap Holdings NV, you can compare the effects of market volatilities on Macquarie Infrastructure and AerCap Holdings 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 Macquarie Infrastructure with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Infrastructure and AerCap Holdings.
Diversification Opportunities for Macquarie Infrastructure and AerCap Holdings
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Macquarie and AerCap is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Infrastructure Co and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV and Macquarie Infrastructure 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 Macquarie Infrastructure Co are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Macquarie Infrastructure i.e., Macquarie Infrastructure and AerCap Holdings go up and down completely randomly.
Pair Corralation between Macquarie Infrastructure and AerCap Holdings
If you would invest 409.00 in Macquarie Infrastructure Co on January 26, 2024 and sell it today you would earn a total of 0.00 from holding Macquarie Infrastructure Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Macquarie Infrastructure Co vs. AerCap Holdings NV
Performance |
| Timeline |
| Macquarie Infrastructure |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AerCap Holdings NV |
Macquarie Infrastructure and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Infrastructure and AerCap Holdings
The main advantage of trading using opposite Macquarie Infrastructure and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Infrastructure position performs unexpectedly, AerCap Holdings 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 Holdings will offset losses from the drop in AerCap Holdings' long position.| Macquarie Infrastructure vs. Sonos Inc | Macquarie Infrastructure vs. Mattel Inc | Macquarie Infrastructure vs. Neogen | Macquarie Infrastructure vs. Emerson Radio |
| AerCap Holdings vs. Ryder System | AerCap Holdings vs. The Aarons | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. GATX Corporation |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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