Correlation Between Air Lease and Fluent

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

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

Diversification Opportunities for Air Lease and Fluent

-0.26

Correlation Coefficient

Air Lease  Fluent

Very good diversification

The 3 months correlation between Air and Fluent is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc 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 Fluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluent Inc has no effect on the direction of Air Lease i.e., Air Lease and Fluent go up and down completely randomly.

Pair Corralation between Air Lease and Fluent

Allowing for the 90-day total investment horizon Air Lease is expected to under-perform the Fluent. But the stock apears to be less risky and, when comparing its historical volatility, Air Lease is 1.61 times less risky than Fluent. The stock trades about -0.04 of its potential returns per unit of risk. The Fluent Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  266.00  in Fluent Inc on December 2, 2024 and sell it today you would earn a total of  5.00  from holding Fluent Inc or generate 1.88% return on investment over 90 days.

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

Air Lease  vs.  Fluent Inc

Air Lease

Risk-Adjusted Performance

Very Weak

Over the last 90 days Air Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Air Lease is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Fluent Inc

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fluent Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fluent is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Air Lease and Fluent

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

The idea behind Air Lease and Fluent Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.