Correlation Between 631005BJ3 and AerCap Holdings

Can any of the company-specific risk be diversified away by investing in both 631005BJ3 and AerCap Holdings 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 631005BJ3 and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US631005BJ39 and AerCap Holdings NV, you can compare the effects of market volatilities on 631005BJ3 and AerCap Holdings 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 631005BJ3 with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 631005BJ3 and AerCap Holdings.

Diversification Opportunities for 631005BJ3 and AerCap Holdings

-0.37

Correlation Coefficient

631005BJ3  AerCap Holdings

Very good diversification

The 3 months correlation between 631005BJ3 and AerCap is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding US631005BJ39 and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV and 631005BJ3 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 US631005BJ39 are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of 631005BJ3 i.e., 631005BJ3 and AerCap Holdings go up and down completely randomly.

Pair Corralation between 631005BJ3 and AerCap Holdings

Assuming the 90 days trading horizon US631005BJ39 is expected to under-perform the AerCap Holdings. But the bond apears to be less risky and, when comparing its historical volatility, US631005BJ39 is 1.16 times less risky than AerCap Holdings. The bond trades about -0.06 of its potential returns per unit of risk. The AerCap Holdings NV is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,479  in AerCap Holdings NV on December 23, 2024 and sell it today you would earn a total of  742.00  from holding AerCap Holdings NV or generate 7.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.54%
Values	Daily Returns

US631005BJ39  vs.  AerCap Holdings NV

US631005BJ39

Risk-Adjusted Performance

Very Weak

Over the last 90 days US631005BJ39 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 631005BJ3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AerCap Holdings NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AerCap Holdings NV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, AerCap Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with 631005BJ3 and AerCap Holdings

The main advantage of trading using opposite 631005BJ3 and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 631005BJ3 position performs unexpectedly, AerCap Holdings 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.

The idea behind US631005BJ39 and AerCap Holdings NV 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.