Correlation Between Air Lease and Delta Electronics

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

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

Diversification Opportunities for Air Lease and Delta Electronics

0.7

Correlation Coefficient

Air Lease  Delta Electronics

Poor diversification

The 3 months correlation between Air and Delta is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Delta Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics Public 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 Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics Public has no effect on the direction of Air Lease i.e., Air Lease and Delta Electronics go up and down completely randomly.

Pair Corralation between Air Lease and Delta Electronics

Assuming the 90 days trading horizon Air Lease is expected to generate 0.42 times more return on investment than Delta Electronics. However, Air Lease is 2.37 times less risky than Delta Electronics. It trades about -0.11 of its potential returns per unit of risk. Delta Electronics Public is currently generating about -0.05 per unit of risk. If you would invest  4,660  in Air Lease on October 26, 2024 and sell it today you would lose (140.00) from holding Air Lease or give up 3.0% of portfolio value over 90 days.

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

Air Lease  vs.  Delta Electronics Public

Air Lease

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Air Lease may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Delta Electronics Public

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Electronics Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Delta Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Air Lease and Delta Electronics

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

The idea behind Air Lease and Delta Electronics Public 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.