Correlation Between ZOOZ Power and Air Lease

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

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

Diversification Opportunities for ZOOZ Power and Air Lease

0.76

Correlation Coefficient

ZOOZ Power  Air Lease

Poor diversification

The 3 months correlation between ZOOZ and Air is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ZOOZ Power Ltd and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and ZOOZ Power 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 ZOOZ Power Ltd 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 ZOOZ Power i.e., ZOOZ Power and Air Lease go up and down completely randomly.

Pair Corralation between ZOOZ Power and Air Lease

Given the investment horizon of 90 days ZOOZ Power Ltd is expected to under-perform the Air Lease. In addition to that, ZOOZ Power is 1.94 times more volatile than Air Lease. It trades about -0.18 of its total potential returns per unit of risk. Air Lease is currently generating about -0.12 per unit of volatility. If you would invest  5,099  in Air Lease on September 27, 2024 and sell it today you would lose (178.00) from holding Air Lease or give up 3.49% of portfolio value over 90 days.

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

ZOOZ Power Ltd  vs.  Air Lease

ZOOZ Power

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZOOZ Power Ltd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, ZOOZ Power showed solid returns over the last few months and may actually be approaching a breakup point.

Air Lease

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Air Lease may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ZOOZ Power and Air Lease

The main advantage of trading using opposite ZOOZ Power and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZOOZ Power 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 ZOOZ Power Ltd 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..