Correlation Between Air Lease and VIB Vermgen

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

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

Diversification Opportunities for Air Lease and VIB Vermgen

0.22

Correlation Coefficient

Air Lease  VIB Vermgen

Modest diversification

The 3 months correlation between Air and VIB is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and VIB Vermgen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIB Vermgen AG 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 VIB Vermgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIB Vermgen AG has no effect on the direction of Air Lease i.e., Air Lease and VIB Vermgen go up and down completely randomly.

Pair Corralation between Air Lease and VIB Vermgen

Assuming the 90 days trading horizon Air Lease is expected to generate 1.46 times more return on investment than VIB Vermgen. However, Air Lease is 1.46 times more volatile than VIB Vermgen AG. It trades about -0.07 of its potential returns per unit of risk. VIB Vermgen AG is currently generating about -0.17 per unit of risk. If you would invest  4,618  in Air Lease on December 20, 2024 and sell it today you would lose (398.00) from holding Air Lease or give up 8.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Air Lease  vs.  VIB Vermgen AG

Air Lease

Risk-Adjusted Performance

Very Weak

Over the last 90 days Air Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

VIB Vermgen AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days VIB Vermgen AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 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 VIB Vermgen

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

The idea behind Air Lease and VIB Vermgen AG 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.