Correlation Between Air Lease and FEMALE HEALTH

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

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

Diversification Opportunities for Air Lease and FEMALE HEALTH

-0.59

Correlation Coefficient

Air Lease  FEMALE HEALTH

Excellent diversification

The 3 months correlation between Air and FEMALE is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of Air Lease i.e., Air Lease and FEMALE HEALTH go up and down completely randomly.

Pair Corralation between Air Lease and FEMALE HEALTH

Assuming the 90 days trading horizon Air Lease is expected to generate 0.29 times more return on investment than FEMALE HEALTH. However, Air Lease is 3.48 times less risky than FEMALE HEALTH. It trades about 0.03 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about -0.04 per unit of risk. If you would invest  3,778  in Air Lease on October 10, 2024 and sell it today you would earn a total of  782.00  from holding Air Lease or generate 20.7% return on investment over 90 days.

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

Air Lease  vs.  FEMALE HEALTH

Air Lease

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Air Lease reported solid returns over the last few months and may actually be approaching a breakup point.

FEMALE HEALTH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FEMALE HEALTH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Air Lease and FEMALE HEALTH

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

The idea behind Air Lease and FEMALE HEALTH 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 CEOs Directory module to screen CEOs from public companies around the world.