Correlation Between Air Lease and Golden Heaven

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

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

Diversification Opportunities for Air Lease and Golden Heaven

-0.6

Correlation Coefficient

Air Lease  Golden Heaven

Excellent diversification

The 3 months correlation between Air and Golden is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Golden Heaven Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Heaven Group 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 Golden Heaven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Heaven Group has no effect on the direction of Air Lease i.e., Air Lease and Golden Heaven go up and down completely randomly.

Pair Corralation between Air Lease and Golden Heaven

Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.2 times more return on investment than Golden Heaven. However, Air Lease is 4.96 times less risky than Golden Heaven. It trades about 0.13 of its potential returns per unit of risk. Golden Heaven Group is currently generating about -0.22 per unit of risk. If you would invest  4,399  in Air Lease on September 17, 2024 and sell it today you would earn a total of  543.00  from holding Air Lease or generate 12.34% return on investment over 90 days.

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

Air Lease  vs.  Golden Heaven Group

Air Lease

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 10 (%) 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.

Golden Heaven Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Heaven Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Air Lease and Golden Heaven

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

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