Correlation Between AerCap Holdings and Weyco

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

Diversification Opportunities for AerCap Holdings and Weyco

-0.3

Correlation Coefficient

AerCap Holdings  Weyco

Very good diversification

The 3 months correlation between AerCap and Weyco is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of AerCap Holdings i.e., AerCap Holdings and Weyco go up and down completely randomly.

Pair Corralation between AerCap Holdings and Weyco

Considering the 90-day investment horizon AerCap Holdings NV is expected to generate 0.81 times more return on investment than Weyco. However, AerCap Holdings NV is 1.23 times less risky than Weyco. It trades about 0.13 of its potential returns per unit of risk. Weyco Group is currently generating about -0.22 per unit of risk. If you would invest  9,427  in AerCap Holdings NV on December 20, 2024 and sell it today you would earn a total of  1,008  from holding AerCap Holdings NV or generate 10.69% return on investment over 90 days.

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

AerCap Holdings NV  vs.  Weyco Group

AerCap Holdings NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AerCap Holdings NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, AerCap Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Weyco Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Weyco Group 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with AerCap Holdings and Weyco

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

The idea behind AerCap Holdings NV and Weyco Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.