Correlation Between Air Lease and Siemens Aktiengesellscha

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

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

Diversification Opportunities for Air Lease and Siemens Aktiengesellscha

0.27

Correlation Coefficient

Air Lease  Siemens Aktiengesellscha

Modest diversification

The 3 months correlation between Air and Siemens is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha 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 Siemens Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of Air Lease i.e., Air Lease and Siemens Aktiengesellscha go up and down completely randomly.

Pair Corralation between Air Lease and Siemens Aktiengesellscha

Assuming the 90 days trading horizon Air Lease is expected to under-perform the Siemens Aktiengesellscha. In addition to that, Air Lease is 1.27 times more volatile than Siemens Aktiengesellschaft. It trades about -0.15 of its total potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.36 per unit of volatility. If you would invest  18,080  in Siemens Aktiengesellschaft on October 26, 2024 and sell it today you would earn a total of  2,885  from holding Siemens Aktiengesellschaft or generate 15.96% return on investment over 90 days.

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

Air Lease  vs.  Siemens Aktiengesellschaft

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.

Siemens Aktiengesellscha

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Siemens Aktiengesellschaft are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Siemens Aktiengesellscha reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Air Lease and Siemens Aktiengesellscha

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

The idea behind Air Lease and Siemens Aktiengesellschaft 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.