Correlation Between AerCap Holdings and 1606 Corp

Can any of the company-specific risk be diversified away by investing in both AerCap Holdings and 1606 Corp 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 AerCap Holdings and 1606 Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AerCap Holdings NV and 1606 Corp, you can compare the effects of market volatilities on AerCap Holdings and 1606 Corp 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 AerCap Holdings with a short position of 1606 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerCap Holdings and 1606 Corp.

Diversification Opportunities for AerCap Holdings and 1606 Corp

-0.32

Correlation Coefficient

AerCap Holdings  1606 Corp

Very good diversification

The 3 months correlation between AerCap and 1606 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV and 1606 Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1606 Corp and AerCap Holdings 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 AerCap Holdings NV are associated (or correlated) with 1606 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1606 Corp has no effect on the direction of AerCap Holdings i.e., AerCap Holdings and 1606 Corp go up and down completely randomly.

Pair Corralation between AerCap Holdings and 1606 Corp

Considering the 90-day investment horizon AerCap Holdings NV is expected to generate 0.11 times more return on investment than 1606 Corp. However, AerCap Holdings NV is 9.37 times less risky than 1606 Corp. It trades about 0.0 of its potential returns per unit of risk. 1606 Corp is currently generating about -0.2 per unit of risk. If you would invest  9,631  in AerCap Holdings NV on October 11, 2024 and sell it today you would lose (16.00) from holding AerCap Holdings NV or give up 0.17% of portfolio value over 90 days.

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

AerCap Holdings NV  vs.  1606 Corp

AerCap Holdings NV

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AerCap Holdings NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, AerCap Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

1606 Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1606 Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with AerCap Holdings and 1606 Corp

The main advantage of trading using opposite AerCap Holdings and 1606 Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerCap Holdings position performs unexpectedly, 1606 Corp 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 1606 Corp will offset losses from the drop in 1606 Corp's long position.

The idea behind AerCap Holdings NV and 1606 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.