Correlation Between Air Lease and Custom Truck
Can any of the company-specific risk be diversified away by investing in both Air Lease and Custom Truck 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 Custom Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Custom Truck One, you can compare the effects of market volatilities on Air Lease and Custom Truck 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 Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Custom Truck.
Diversification Opportunities for Air Lease and Custom Truck
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Custom is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One 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 Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of Air Lease i.e., Air Lease and Custom Truck go up and down completely randomly.
Pair Corralation between Air Lease and Custom Truck
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.3 times less return on investment than Custom Truck. But when comparing it to its historical volatility, Air Lease is 1.69 times less risky than Custom Truck. It trades about 0.26 of its potential returns per unit of risk. Custom Truck One is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 426.00 in Custom Truck One on April 24, 2025 and sell it today you would earn a total of 147.00 from holding Custom Truck One or generate 34.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Air Lease vs. Custom Truck One
Performance |
Timeline |
Air Lease |
Custom Truck One |
Air Lease and Custom Truck Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Lease and Custom Truck
The main advantage of trading using opposite Air Lease and Custom Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Custom Truck 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 Custom Truck will offset losses from the drop in Custom Truck's long position.Air Lease vs. Fortress Transportation and | Air Lease vs. Flexsteel Industries | Air Lease vs. Rocky Brands | Air Lease vs. REX American Resources |
Custom Truck vs. Alta Equipment Group | Custom Truck vs. McGrath RentCorp | Custom Truck vs. GATX Corporation | Custom Truck vs. Mega Matrix Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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