Correlation Between GATX Corp and Air Lease

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

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

Diversification Opportunities for GATX Corp and Air Lease

0.52
  Correlation Coefficient
GATX Corp
Air Lease Corp

Very weak diversification

The 1 month correlation between GATX Corp and Air Lease is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp and Air Lease Corp in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Air Lease Corp and GATX Corp 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 GATX Corp are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease Corp has no effect on the direction of GATX Corp i.e., GATX Corp and Air Lease go up and down completely randomly.

Pair Corralation between GATX Corp and Air Lease

Given the investment horizon of 90 days GATX Corp is expected to generate 0.87 times more return on investment than Air Lease. However, GATX Corp is 1.14 times less risky than Air Lease. It trades about 0.12 of its potential returns per unit of risk. Air Lease Corp is currently generating about 0.07 per unit of risk. If you would invest  8,669  in GATX Corp on May 4, 2021 and sell it today you would earn a total of  344.00  from holding GATX Corp or generate 3.97% return on investment over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

GATX Corp  vs.  Air Lease Corp

 Performance (%) 
      Timeline 
GATX Corp 
 GATX Corp Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in GATX Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly sluggish basic indicators, GATX Corp showed solid returns over the last few months and may actually be approaching a breakup point.

GATX Corp Price Channel

Air Lease Corp 
 Air Lease Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, Air Lease may actually be approaching a critical reversion point that can send shares even higher in September 2021.

Air Lease Price Channel

GATX Corp and Air Lease Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with GATX Corp and Air Lease

The main advantage of trading using opposite GATX Corp and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GATX Corp position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.
The idea behind GATX Corp and Air Lease Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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