Correlation Between Air Lease and A2Z Smart

Can any of the company-specific risk be diversified away by investing in both Air Lease and A2Z Smart 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 Air Lease and A2Z Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Air Lease and A2Z Smart Technologies, you can compare the effects of market volatilities on Air Lease and A2Z Smart 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 Air Lease with a short position of A2Z Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and A2Z Smart.

Diversification Opportunities for Air Lease and A2Z Smart

0.82

Correlation Coefficient

Air Lease  A2Z Smart

Very poor diversification

The 3 months correlation between Air and A2Z is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and A2Z Smart Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A2Z Smart Technologies and Air Lease 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 Air Lease are associated (or correlated) with A2Z Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A2Z Smart Technologies has no effect on the direction of Air Lease i.e., Air Lease and A2Z Smart go up and down completely randomly.

Pair Corralation between Air Lease and A2Z Smart

Allowing for the 90-day total investment horizon Air Lease is expected to generate 4.08 times less return on investment than A2Z Smart. But when comparing it to its historical volatility, Air Lease is 3.48 times less risky than A2Z Smart. It trades about 0.19 of its potential returns per unit of risk. A2Z Smart Technologies is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  475.00  in A2Z Smart Technologies on September 20, 2024 and sell it today you would earn a total of  255.00  from holding A2Z Smart Technologies or generate 53.68% return on investment over 90 days.

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

Air Lease  vs.  A2Z Smart Technologies

Air Lease

Risk-Adjusted Performance

6 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady essential indicators, Air Lease may actually be approaching a critical reversion point that can send shares even higher in January 2025.

A2Z Smart Technologies

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in A2Z Smart Technologies are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, A2Z Smart showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Air Lease and A2Z Smart

The main advantage of trading using opposite Air Lease and A2Z Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, A2Z Smart 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 A2Z Smart will offset losses from the drop in A2Z Smart's long position.

The idea behind Air Lease and A2Z Smart Technologies 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 the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.