Correlation Between Air Lease and Siriuspoint
Can any of the company-specific risk be diversified away by investing in both Air Lease and Siriuspoint 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 Siriuspoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Siriuspoint, you can compare the effects of market volatilities on Air Lease and Siriuspoint 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 Siriuspoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Siriuspoint.
Diversification Opportunities for Air Lease and Siriuspoint
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Siriuspoint is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint 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 Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of Air Lease i.e., Air Lease and Siriuspoint go up and down completely randomly.
Pair Corralation between Air Lease and Siriuspoint
Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.74 times more return on investment than Siriuspoint. However, Air Lease is 1.36 times less risky than Siriuspoint. It trades about 0.13 of its potential returns per unit of risk. Siriuspoint is currently generating about 0.08 per unit of risk. If you would invest 4,402 in Air Lease on September 14, 2024 and sell it today you would earn a total of 535.00 from holding Air Lease or generate 12.15% 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. Siriuspoint
Performance |
Timeline |
Air Lease |
Siriuspoint |
Air Lease and Siriuspoint Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Lease and Siriuspoint
The main advantage of trading using opposite Air Lease and Siriuspoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Siriuspoint 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 Siriuspoint will offset losses from the drop in Siriuspoint's long position.Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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