Correlation Between Air Lease and PAMT P

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

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

Diversification Opportunities for Air Lease and PAMT P

0.56

Correlation Coefficient

Air Lease  PAMT P

Very weak diversification

The 3 months correlation between Air and PAMT is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and PAMT P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAMT P 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 PAMT P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAMT P has no effect on the direction of Air Lease i.e., Air Lease and PAMT P go up and down completely randomly.

Pair Corralation between Air Lease and PAMT P

Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.39 times more return on investment than PAMT P. However, Air Lease is 2.59 times less risky than PAMT P. It trades about 0.01 of its potential returns per unit of risk. PAMT P is currently generating about -0.03 per unit of risk. If you would invest  5,692  in Air Lease on May 19, 2025 and sell it today you would earn a total of  34.00  from holding Air Lease or generate 0.6% 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.  PAMT P

Air Lease

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Air Lease is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PAMT P

Risk-Adjusted Performance

Weakest

Over the last 90 days PAMT P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Air Lease and PAMT P

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

The idea behind Air Lease and PAMT P 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.