Correlation Between Air Lease and QMMM Holdings

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

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

Diversification Opportunities for Air Lease and QMMM Holdings

-0.38

Correlation Coefficient

Air Lease  QMMM Holdings

Very good diversification

The 3 months correlation between Air and QMMM is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and QMMM Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QMMM Holdings Limited 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 QMMM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QMMM Holdings Limited has no effect on the direction of Air Lease i.e., Air Lease and QMMM Holdings go up and down completely randomly.

Pair Corralation between Air Lease and QMMM Holdings

Allowing for the 90-day total investment horizon Air Lease is expected to under-perform the QMMM Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Air Lease is 4.23 times less risky than QMMM Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The QMMM Holdings Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  64.00  in QMMM Holdings Limited on December 17, 2024 and sell it today you would earn a total of  77.00  from holding QMMM Holdings Limited or generate 120.31% 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.  QMMM Holdings Limited

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.

QMMM Holdings Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in QMMM Holdings Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, QMMM Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Air Lease and QMMM Holdings

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

The idea behind Air Lease and QMMM Holdings Limited 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.