Correlation Between COFCO Joycome and Air Lease

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

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

Diversification Opportunities for COFCO Joycome and Air Lease

-0.18

Correlation Coefficient

COFCO Joycome  Air Lease

Good diversification

The 3 months correlation between COFCO and Air is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and COFCO Joycome 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 COFCO Joycome Foods 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 has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Air Lease go up and down completely randomly.

Pair Corralation between COFCO Joycome and Air Lease

Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the Air Lease. In addition to that, COFCO Joycome is 1.98 times more volatile than Air Lease. It trades about -0.06 of its total potential returns per unit of risk. Air Lease is currently generating about 0.17 per unit of volatility. If you would invest  4,101  in Air Lease on September 27, 2024 and sell it today you would earn a total of  539.00  from holding Air Lease or generate 13.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

COFCO Joycome Foods  vs.  Air Lease

COFCO Joycome Foods

Risk-Adjusted Performance

0 of 100

Very Weak

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

Air Lease

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, Air Lease reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COFCO Joycome and Air Lease

The main advantage of trading using opposite COFCO Joycome and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome 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 COFCO Joycome Foods and Air Lease 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.