Correlation Between Air Lease and COMPUTER MODELLING

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

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

Diversification Opportunities for Air Lease and COMPUTER MODELLING

0.08

Correlation Coefficient

Air Lease  COMPUTER MODELLING

Significant diversification

The 3 months correlation between Air and COMPUTER is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and COMPUTER MODELLING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUTER MODELLING 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 COMPUTER MODELLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUTER MODELLING has no effect on the direction of Air Lease i.e., Air Lease and COMPUTER MODELLING go up and down completely randomly.

Pair Corralation between Air Lease and COMPUTER MODELLING

Assuming the 90 days trading horizon Air Lease is expected to generate 10.74 times more return on investment than COMPUTER MODELLING. However, Air Lease is 10.74 times more volatile than COMPUTER MODELLING. It trades about 0.04 of its potential returns per unit of risk. COMPUTER MODELLING is currently generating about 0.12 per unit of risk. If you would invest  3,704  in Air Lease on October 22, 2024 and sell it today you would earn a total of  816.00  from holding Air Lease or generate 22.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.75%
Values	Daily Returns

Air Lease  vs.  COMPUTER MODELLING

Air Lease

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, Air Lease reported solid returns over the last few months and may actually be approaching a breakup point.

COMPUTER MODELLING

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUTER MODELLING are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking indicators, COMPUTER MODELLING is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Air Lease and COMPUTER MODELLING

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

The idea behind Air Lease and COMPUTER MODELLING 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.