Correlation Between AerCap Holdings and Franklin Select

Can any of the company-specific risk be diversified away by investing in both AerCap Holdings and Franklin Select 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 Franklin Select 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 Franklin Select Realty, you can compare the effects of market volatilities on AerCap Holdings and Franklin Select 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 Franklin Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerCap Holdings and Franklin Select.

Diversification Opportunities for AerCap Holdings and Franklin Select

0.0

Correlation Coefficient

AerCap Holdings  Franklin Select

Pay attention - limited upside

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

Pair Corralation between AerCap Holdings and Franklin Select

If you would invest  9,520  in AerCap Holdings NV on October 24, 2024 and sell it today you would lose (31.00) from holding AerCap Holdings NV or give up 0.33% of portfolio value over 90 days.

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

AerCap Holdings NV  vs.  Franklin Select Realty

AerCap Holdings NV

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days AerCap Holdings NV has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Franklin Select Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Select Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Franklin Select is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with AerCap Holdings and Franklin Select

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

The idea behind AerCap Holdings NV and Franklin Select Realty 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.