Correlation Between Air Lease and KENEDIX OFFICE

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

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

Diversification Opportunities for Air Lease and KENEDIX OFFICE

0.03

Correlation Coefficient

Air Lease  KENEDIX OFFICE

Significant diversification

The 3 months correlation between Air and KENEDIX is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV 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 KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of Air Lease i.e., Air Lease and KENEDIX OFFICE go up and down completely randomly.

Pair Corralation between Air Lease and KENEDIX OFFICE

Assuming the 90 days trading horizon Air Lease is expected to under-perform the KENEDIX OFFICE. But the stock apears to be less risky and, when comparing its historical volatility, Air Lease is 2.2 times less risky than KENEDIX OFFICE. The stock trades about -0.19 of its potential returns per unit of risk. The KENEDIX OFFICE INV is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  89,000  in KENEDIX OFFICE INV on October 10, 2024 and sell it today you would earn a total of  2,500  from holding KENEDIX OFFICE INV or generate 2.81% return on investment over 90 days.

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

Air Lease  vs.  KENEDIX OFFICE INV

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.

KENEDIX OFFICE INV

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KENEDIX OFFICE INV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, KENEDIX OFFICE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Air Lease and KENEDIX OFFICE

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

The idea behind Air Lease and KENEDIX OFFICE INV 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.