Correlation Between Air Lease and RB Global

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

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

Diversification Opportunities for Air Lease and RB Global

0.07

Correlation Coefficient

Air Lease  RB Global

Significant diversification

The 3 months correlation between Air and RBA is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and RB Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RB Global 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 RB Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RB Global has no effect on the direction of Air Lease i.e., Air Lease and RB Global go up and down completely randomly.

Pair Corralation between Air Lease and RB Global

Allowing for the 90-day total investment horizon Air Lease is expected to generate 22.09 times less return on investment than RB Global. In addition to that, Air Lease is 1.32 times more volatile than RB Global. It trades about 0.0 of its total potential returns per unit of risk. RB Global is currently generating about 0.1 per unit of volatility. If you would invest  9,147  in RB Global on December 25, 2024 and sell it today you would earn a total of  905.00  from holding RB Global or generate 9.89% return on investment over 90 days.

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

Air Lease  vs.  RB Global

Air Lease

Risk-Adjusted Performance

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.

RB Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RB Global are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, RB Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Air Lease and RB Global

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

The idea behind Air Lease and RB Global 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.