Correlation Between AerCap Holdings and Duluth Holdings

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

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

Diversification Opportunities for AerCap Holdings and Duluth Holdings

-0.23

Correlation Coefficient

AerCap Holdings  Duluth Holdings

Very good diversification

The 3 months correlation between AerCap and Duluth is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings and AerCap Holdings 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 AerCap Holdings NV are associated (or correlated) with Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of AerCap Holdings i.e., AerCap Holdings and Duluth Holdings go up and down completely randomly.

Pair Corralation between AerCap Holdings and Duluth Holdings

Considering the 90-day investment horizon AerCap Holdings NV is expected to generate 0.63 times more return on investment than Duluth Holdings. However, AerCap Holdings NV is 1.6 times less risky than Duluth Holdings. It trades about 0.0 of its potential returns per unit of risk. Duluth Holdings is currently generating about -0.33 per unit of risk. If you would invest  8,568  in AerCap Holdings NV on January 29, 2024 and sell it today you would lose (19.00) from holding AerCap Holdings NV or give up 0.22% of portfolio value over 90 days.

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

AerCap Holdings NV  vs.  Duluth Holdings

AerCap Holdings NV

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AerCap Holdings NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, AerCap Holdings may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Duluth Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duluth Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with AerCap Holdings and Duluth Holdings

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

The idea behind AerCap Holdings NV and Duluth 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.