Correlation Between Shui On and Air Lease

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

By analyzing existing cross correlation between Shui On Land and Air Lease, you can compare the effects of market volatilities on Shui On and Air 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 Shui On with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shui On and Air Lease.

Diversification Opportunities for Shui On and Air Lease

0.26

Correlation Coefficient

Shui On  Air Lease

Modest diversification

The 3 months correlation between Shui and Air is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shui On Land and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Shui On 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 Shui On Land are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Shui On i.e., Shui On and Air Lease go up and down completely randomly.

Pair Corralation between Shui On and Air Lease

Assuming the 90 days horizon Shui On Land is expected to generate 13.58 times more return on investment than Air Lease. However, Shui On is 13.58 times more volatile than Air Lease. It trades about 0.06 of its potential returns per unit of risk. Air Lease is currently generating about 0.04 per unit of risk. If you would invest  12.00  in Shui On Land on September 20, 2024 and sell it today you would lose (6.00) from holding Shui On Land or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	30.24%
Values	Daily Returns

Shui On Land  vs.  Air Lease

Shui On Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shui On Land has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Shui On is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Air Lease

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Air Lease is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Shui On and Air Lease

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

The idea behind Shui On Land and Air Lease 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.