Correlation Between Air Lease and Mingzhu Logistics
Can any of the company-specific risk be diversified away by investing in both Air Lease and Mingzhu Logistics 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 Mingzhu Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Mingzhu Logistics Holdings, you can compare the effects of market volatilities on Air Lease and Mingzhu Logistics 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 Mingzhu Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Mingzhu Logistics.
Diversification Opportunities for Air Lease and Mingzhu Logistics
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Mingzhu is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Mingzhu Logistics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mingzhu Logistics 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 Mingzhu Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mingzhu Logistics has no effect on the direction of Air Lease i.e., Air Lease and Mingzhu Logistics go up and down completely randomly.
Pair Corralation between Air Lease and Mingzhu Logistics
Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.27 times more return on investment than Mingzhu Logistics. However, Air Lease is 3.75 times less risky than Mingzhu Logistics. It trades about 0.09 of its potential returns per unit of risk. Mingzhu Logistics Holdings is currently generating about -0.06 per unit of risk. If you would invest 4,509 in Air Lease on September 30, 2024 and sell it today you would earn a total of 381.00 from holding Air Lease or generate 8.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Air Lease vs. Mingzhu Logistics Holdings
Performance |
Timeline |
Air Lease |
Mingzhu Logistics |
Air Lease and Mingzhu Logistics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Lease and Mingzhu Logistics
The main advantage of trading using opposite Air Lease and Mingzhu Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Mingzhu Logistics 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 Mingzhu Logistics will offset losses from the drop in Mingzhu Logistics' long position.The idea behind Air Lease and Mingzhu Logistics Holdings 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.Mingzhu Logistics vs. Universal Logistics Holdings | ||
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Check out your portfolio center.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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