Correlation Between 655844CL0 and AerCap Holdings

Can any of the company-specific risk be diversified away by investing in both 655844CL0 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 655844CL0 and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NSC 29 25 AUG 51 and AerCap Holdings NV, you can compare the effects of market volatilities on 655844CL0 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 655844CL0 with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 655844CL0 and AerCap Holdings.

Diversification Opportunities for 655844CL0 and AerCap Holdings

-0.14

Correlation Coefficient

655844CL0  AerCap Holdings

Good diversification

The 3 months correlation between 655844CL0 and AerCap is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NSC 29 25 AUG 51 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 655844CL0 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 NSC 29 25 AUG 51 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 655844CL0 i.e., 655844CL0 and AerCap Holdings go up and down completely randomly.

Pair Corralation between 655844CL0 and AerCap Holdings

Assuming the 90 days trading horizon NSC 29 25 AUG 51 is expected to generate 2.72 times more return on investment than AerCap Holdings. However, 655844CL0 is 2.72 times more volatile than AerCap Holdings NV. It trades about 0.23 of its potential returns per unit of risk. AerCap Holdings NV is currently generating about -0.04 per unit of risk. If you would invest  6,492  in NSC 29 25 AUG 51 on October 4, 2024 and sell it today you would earn a total of  508.00  from holding NSC 29 25 AUG 51 or generate 7.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	45.45%
Values	Daily Returns

NSC 29 25 AUG 51  vs.  AerCap Holdings NV

NSC 29 25

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NSC 29 25 AUG 51 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 655844CL0 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AerCap Holdings NV

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AerCap Holdings NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, AerCap Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with 655844CL0 and AerCap Holdings

The main advantage of trading using opposite 655844CL0 and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 655844CL0 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 NSC 29 25 AUG 51 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.