Correlation Between Anterix and Air Lease

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

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

Diversification Opportunities for Anterix and Air Lease

-0.18

Correlation Coefficient

Anterix  Air Lease

Good diversification

The 3 months correlation between Anterix and Air is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Anterix and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Anterix 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 Anterix are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Anterix i.e., Anterix and Air Lease go up and down completely randomly.

Pair Corralation between Anterix and Air Lease

Given the investment horizon of 90 days Anterix is expected to generate 1.76 times more return on investment than Air Lease. However, Anterix is 1.76 times more volatile than Air Lease. It trades about -0.1 of its potential returns per unit of risk. Air Lease is currently generating about -0.23 per unit of risk. If you would invest  3,280  in Anterix on September 25, 2024 and sell it today you would lose (167.00) from holding Anterix or give up 5.09% of portfolio value over 90 days.

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

Anterix  vs.  Air Lease

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Air Lease

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Air Lease may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Anterix and Air Lease

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

The idea behind Anterix and Air Lease 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.