Correlation Between Air Lease and Globus Maritime

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

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

Diversification Opportunities for Air Lease and Globus Maritime

-0.25

Correlation Coefficient

Air Lease  Globus Maritime

Very good diversification

The 3 months correlation between Air and Globus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Globus Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globus Maritime 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 Globus Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globus Maritime has no effect on the direction of Air Lease i.e., Air Lease and Globus Maritime go up and down completely randomly.

Pair Corralation between Air Lease and Globus Maritime

Allowing for the 90-day total investment horizon Air Lease is expected to generate 12.05 times less return on investment than Globus Maritime. But when comparing it to its historical volatility, Air Lease is 1.49 times less risky than Globus Maritime. It trades about 0.0 of its potential returns per unit of risk. Globus Maritime is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  116.00  in Globus Maritime on December 26, 2024 and sell it today you would earn a total of  3.00  from holding Globus Maritime or generate 2.59% 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.  Globus Maritime

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.

Globus Maritime

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Globus Maritime are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Globus Maritime is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Air Lease and Globus Maritime

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

The idea behind Air Lease and Globus Maritime 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.