Correlation Between Air Lease and Uber Technologies

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

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

Diversification Opportunities for Air Lease and Uber Technologies

-0.58

Correlation Coefficient

Air Lease  Uber Technologies

Excellent diversification

The 3 months correlation between Air and Uber is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Air Lease i.e., Air Lease and Uber Technologies go up and down completely randomly.

Pair Corralation between Air Lease and Uber Technologies

Assuming the 90 days trading horizon Air Lease is expected to generate 0.59 times more return on investment than Uber Technologies. However, Air Lease is 1.71 times less risky than Uber Technologies. It trades about -0.21 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.34 per unit of risk. If you would invest  4,917  in Air Lease on September 25, 2024 and sell it today you would lose (277.00) from holding Air Lease or give up 5.63% of portfolio value over 90 days.

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

Air Lease  vs.  Uber Technologies

Air Lease

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 11 (%) 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.

Uber Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uber Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Air Lease and Uber Technologies

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

The idea behind Air Lease and Uber Technologies 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.