Correlation Between Air Lease and RadNet
Can any of the company-specific risk be diversified away by investing in both Air Lease and RadNet 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 RadNet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and RadNet Inc, you can compare the effects of market volatilities on Air Lease and RadNet 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 RadNet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and RadNet.
Diversification Opportunities for Air Lease and RadNet
Very poor diversification
The 3 months correlation between Air and RadNet is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and RadNet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RadNet Inc 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 RadNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RadNet Inc has no effect on the direction of Air Lease i.e., Air Lease and RadNet go up and down completely randomly.
Pair Corralation between Air Lease and RadNet
Allowing for the 90-day total investment horizon Air Lease is expected to generate 4.33 times less return on investment than RadNet. But when comparing it to its historical volatility, Air Lease is 1.44 times less risky than RadNet. It trades about 0.04 of its potential returns per unit of risk. RadNet Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,591 in RadNet Inc on September 20, 2024 and sell it today you would earn a total of 3,606 from holding RadNet Inc or generate 100.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Air Lease vs. RadNet Inc
Performance |
Timeline |
Air Lease |
RadNet Inc |
Air Lease and RadNet Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Lease and RadNet
The main advantage of trading using opposite Air Lease and RadNet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, RadNet 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 RadNet will offset losses from the drop in RadNet's long position.Air Lease vs. McGrath RentCorp | Air Lease vs. Custom Truck One | Air Lease vs. Alta Equipment Group | Air Lease vs. PROG Holdings |
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Check out your portfolio center.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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