Correlation Between Air Lease and Array Technologies

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

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

Diversification Opportunities for Air Lease and Array Technologies

0.41

Correlation Coefficient

Air Lease  Array Technologies

Very weak diversification

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

Pair Corralation between Air Lease and Array Technologies

Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.21 times more return on investment than Array Technologies. However, Air Lease is 4.67 times less risky than Array Technologies. It trades about 0.01 of its potential returns per unit of risk. Array Technologies is currently generating about -0.04 per unit of risk. If you would invest  5,526  in Air Lease on May 10, 2025 and sell it today you would earn a total of  26.00  from holding Air Lease or generate 0.47% 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.  Array Technologies

Air Lease

Risk-Adjusted Performance

Weakest

Over the last 90 days Air Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Air Lease is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Array Technologies

Risk-Adjusted Performance

Weakest

Over the last 90 days Array Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Air Lease and Array Technologies

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

The idea behind Air Lease and Array Technologies 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.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.