Correlation Between Air Lease and TD Holdings

Can any of the company-specific risk be diversified away by investing in both Air Lease and TD 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 Air Lease and TD Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Air Lease and TD Holdings, you can compare the effects of market volatilities on Air Lease and TD 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 Air Lease with a short position of TD Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and TD Holdings.

Diversification Opportunities for Air Lease and TD Holdings

0.16

Correlation Coefficient

Air Lease  TD Holdings

Average diversification

The 3 months correlation between Air and GLG is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and TD Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Holdings 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 TD Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Holdings has no effect on the direction of Air Lease i.e., Air Lease and TD Holdings go up and down completely randomly.

Pair Corralation between Air Lease and TD Holdings

If you would invest  4,665  in Air Lease on January 20, 2024 and sell it today you would earn a total of  208.00  from holding Air Lease or generate 4.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Air Lease  vs.  TD Holdings

Air Lease

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Air Lease disclosed solid returns over the last few months and may actually be approaching a breakup point.

TD Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TD Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, TD Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Air Lease and TD Holdings

The main advantage of trading using opposite Air Lease and TD Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, TD 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 TD Holdings will offset losses from the drop in TD Holdings' long position.

The idea behind Air Lease and TD Holdings 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.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.