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

0.58

Correlation Coefficient

Air Lease  Custom Truck

Very weak diversification

The 3 months correlation between Air and Custom is 0.58. 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 0.57 times more return on investment than Custom Truck. However, Air Lease is 1.76 times less risky than Custom Truck. It trades about -0.05 of its potential returns per unit of risk. Custom Truck One is currently generating about -0.06 per unit of risk. If you would invest  4,715  in Air Lease on January 21, 2025 and sell it today you would lose (571.00) from holding Air Lease or give up 12.11% of portfolio value over 90 days.

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

Air Lease  vs.  Custom Truck One

Air Lease

Risk-Adjusted Performance

Very Weak

Over the last 90 days Air Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Custom Truck One

Risk-Adjusted Performance

Very Weak

Over the last 90 days Custom Truck One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

The idea behind Air Lease and Custom Truck One 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 Stocks Directory module to find actively traded stocks across global markets.