Correlation Between Fly Leasing and Herc Holdings

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

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

Diversification Opportunities for Fly Leasing and Herc Holdings

0.0

Correlation Coefficient

Fly Leasing  Herc Holdings

Pay attention - limited upside

The 3 months correlation between Fly and Herc is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fly Leasing Limited and Herc Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herc Holdings and Fly Leasing 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 Fly Leasing Limited are associated (or correlated) with Herc Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herc Holdings has no effect on the direction of Fly Leasing i.e., Fly Leasing and Herc Holdings go up and down completely randomly.

Pair Corralation between Fly Leasing and Herc Holdings

If you would invest (100.00) in Fly Leasing Limited on January 20, 2024 and sell it today you would earn a total of  100.00  from holding Fly Leasing Limited or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fly Leasing Limited  vs.  Herc Holdings

Fly Leasing Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fly Leasing Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Fly Leasing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Herc Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Herc Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Herc Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Fly Leasing and Herc Holdings

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

The idea behind Fly Leasing Limited and Herc 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.