Correlation Between Air Lease and Lion One

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

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

Diversification Opportunities for Air Lease and Lion One

-0.58

Correlation Coefficient

Air Lease  Lion One

Excellent diversification

The 3 months correlation between Air and Lion is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Air Lease i.e., Air Lease and Lion One go up and down completely randomly.

Pair Corralation between Air Lease and Lion One

Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.43 times more return on investment than Lion One. However, Air Lease is 2.34 times less risky than Lion One. It trades about 0.03 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.03 per unit of risk. If you would invest  4,175  in Air Lease on November 20, 2024 and sell it today you would earn a total of  770.00  from holding Air Lease or generate 18.44% return on investment over 90 days.

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

Air Lease  vs.  Lion One Metals

Air Lease

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Lion One Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lion One Metals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Lion One may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Air Lease and Lion One

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

The idea behind Air Lease and Lion One Metals 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.