Correlation Between Air Lease and EXPEDIA

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

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

Diversification Opportunities for Air Lease and EXPEDIA

0.13

Correlation Coefficient

Air Lease  EXPEDIA

Average diversification

The 3 months correlation between Air and EXPEDIA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and EXPEDIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXPEDIA GROUP 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 EXPEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXPEDIA GROUP INC has no effect on the direction of Air Lease i.e., Air Lease and EXPEDIA go up and down completely randomly.

Pair Corralation between Air Lease and EXPEDIA

Allowing for the 90-day total investment horizon Air Lease is expected to generate 2.24 times more return on investment than EXPEDIA. However, Air Lease is 2.24 times more volatile than EXPEDIA GROUP INC. It trades about 0.06 of its potential returns per unit of risk. EXPEDIA GROUP INC is currently generating about -0.13 per unit of risk. If you would invest  4,477  in Air Lease on October 26, 2024 and sell it today you would earn a total of  220.00  from holding Air Lease or generate 4.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Air Lease  vs.  EXPEDIA GROUP INC

Air Lease

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Air Lease is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

EXPEDIA GROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EXPEDIA GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for EXPEDIA GROUP INC investors.

Pair Trading with Air Lease and EXPEDIA

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

The idea behind Air Lease and EXPEDIA GROUP INC 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.