Correlation Between Air Lease and Eshallgo

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

By analyzing existing cross correlation between Air Lease and Eshallgo Class A, you can compare the effects of market volatilities on Air Lease and Eshallgo 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 Eshallgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Eshallgo.

Diversification Opportunities for Air Lease and Eshallgo

0.67

Correlation Coefficient

Air Lease  Eshallgo

Poor diversification

The 3 months correlation between Air and Eshallgo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Eshallgo Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eshallgo Class A 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 Eshallgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eshallgo Class A has no effect on the direction of Air Lease i.e., Air Lease and Eshallgo go up and down completely randomly.

Pair Corralation between Air Lease and Eshallgo

Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.11 times more return on investment than Eshallgo. However, Air Lease is 9.21 times less risky than Eshallgo. It trades about -0.12 of its potential returns per unit of risk. Eshallgo Class A is currently generating about -0.24 per unit of risk. If you would invest  4,861  in Air Lease on October 22, 2024 and sell it today you would lose (195.00) from holding Air Lease or give up 4.01% of portfolio value over 90 days.

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

Air Lease  vs.  Eshallgo Class A

Air Lease

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Air Lease may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Eshallgo Class A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eshallgo Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Air Lease and Eshallgo

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

The idea behind Air Lease and Eshallgo Class A 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.