Correlation Between Applied Industrial and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both Applied Industrial and AerCap 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 Applied Industrial and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Industrial Technologies and AerCap Holdings NV, you can compare the effects of market volatilities on Applied Industrial and AerCap 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 Applied Industrial with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Industrial and AerCap Holdings.
Diversification Opportunities for Applied Industrial and AerCap Holdings
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and AerCap is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Applied Industrial Technologie and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV and Applied Industrial 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 Applied Industrial Technologies are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Applied Industrial i.e., Applied Industrial and AerCap Holdings go up and down completely randomly.
Pair Corralation between Applied Industrial and AerCap Holdings
Considering the 90-day investment horizon Applied Industrial Technologies is expected to under-perform the AerCap Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Applied Industrial Technologies is 1.06 times less risky than AerCap Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The AerCap Holdings NV is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 11,286 in AerCap Holdings NV on August 15, 2025 and sell it today you would earn a total of 2,366 from holding AerCap Holdings NV or generate 20.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Industrial Technologie vs. AerCap Holdings NV
Performance |
| Timeline |
| Applied Industrial |
| AerCap Holdings NV |
Applied Industrial and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Industrial and AerCap Holdings
The main advantage of trading using opposite Applied Industrial and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Industrial position performs unexpectedly, AerCap 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.| Applied Industrial vs. Pool Corporation | Applied Industrial vs. Core Main | Applied Industrial vs. Donaldson | Applied Industrial vs. Flowserve |
| AerCap Holdings vs. Fortress Transp Infra | AerCap Holdings vs. Curtiss Wright | AerCap Holdings vs. Elbit Systems | AerCap Holdings vs. Veralto |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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