Correlation Between Sancus Lending and CAP LEASE

Can any of the company-specific risk be diversified away by investing in both Sancus Lending and CAP LEASE 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 Sancus Lending and CAP LEASE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sancus Lending Group and CAP LEASE AVIATION, you can compare the effects of market volatilities on Sancus Lending and CAP LEASE 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 Sancus Lending with a short position of CAP LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sancus Lending and CAP LEASE.

Diversification Opportunities for Sancus Lending and CAP LEASE

0.36

Correlation Coefficient

Sancus Lending  CAP LEASE

Weak diversification

The 3 months correlation between Sancus and CAP is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sancus Lending Group and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION and Sancus Lending 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 Sancus Lending Group are associated (or correlated) with CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of Sancus Lending i.e., Sancus Lending and CAP LEASE go up and down completely randomly.

Pair Corralation between Sancus Lending and CAP LEASE

Assuming the 90 days trading horizon Sancus Lending Group is expected to under-perform the CAP LEASE. But the stock apears to be less risky and, when comparing its historical volatility, Sancus Lending Group is 2.71 times less risky than CAP LEASE. The stock trades about -0.31 of its potential returns per unit of risk. The CAP LEASE AVIATION is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  50.00  in CAP LEASE AVIATION on December 4, 2024 and sell it today you would earn a total of  3.00  from holding CAP LEASE AVIATION or generate 6.0% return on investment over 90 days.

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

Sancus Lending Group  vs.  CAP LEASE AVIATION

Sancus Lending Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sancus Lending Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Sancus Lending unveiled solid returns over the last few months and may actually be approaching a breakup point.

CAP LEASE AVIATION

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CAP LEASE AVIATION are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, CAP LEASE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sancus Lending and CAP LEASE

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

The idea behind Sancus Lending Group and CAP LEASE AVIATION 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.