Correlation Between Air Lease and Siriuspoint

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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 Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Air Lease  vs.  Siriuspoint

 Performance 
       Timeline  
Air Lease 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Air Lease may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Siriuspoint 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Siriuspoint may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.
The idea behind Air Lease and Siriuspoint 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.
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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