Correlation Between Air Lease and Aircastle

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Can any of the company-specific risk be diversified away by investing in both Air Lease and Aircastle 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 Aircastle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Aircastle Limited, you can compare the effects of market volatilities on Air Lease and Aircastle 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 Aircastle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Aircastle.

Diversification Opportunities for Air Lease and Aircastle

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Air and Aircastle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Aircastle Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aircastle Limited 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 Aircastle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aircastle Limited has no effect on the direction of Air Lease i.e., Air Lease and Aircastle go up and down completely randomly.

Pair Corralation between Air Lease and Aircastle

If you would invest  3,959  in Air Lease on December 30, 2023 and sell it today you would earn a total of  1,185  from holding Air Lease or generate 29.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Air Lease  vs.  Aircastle Limited

 Performance 
       Timeline  
Air Lease 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Air Lease disclosed solid returns over the last few months and may actually be approaching a breakup point.
Aircastle Limited 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Aircastle Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Aircastle is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Air Lease and Aircastle Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Air Lease and Aircastle

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

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