Correlation Between Air Lease and Air Products

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

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

Diversification Opportunities for Air Lease and Air Products

0.41

Correlation Coefficient

Air Lease  Air Products

Very weak diversification

The 3 months correlation between Air and Air is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Air Lease 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 Air Lease are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Air Lease i.e., Air Lease and Air Products go up and down completely randomly.

Pair Corralation between Air Lease and Air Products

Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.0 times more return on investment than Air Products. However, Air Lease is 1.0 times more volatile than Air Products and. It trades about 0.09 of its potential returns per unit of risk. Air Products and is currently generating about 0.01 per unit of risk. If you would invest  4,480  in Air Lease on September 25, 2024 and sell it today you would earn a total of  381.00  from holding Air Lease or generate 8.5% return on investment over 90 days.

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

Air Lease  vs.  Air Products and

Air Lease

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 7 (%) 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.

Air Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air Products and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Air Products is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Air Lease and Air Products

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

The idea behind Air Lease and Air Products and 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.