Correlation Between FTAI Infrastructure and 1847 Holdings

Can any of the company-specific risk be diversified away by investing in both FTAI Infrastructure and 1847 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 FTAI Infrastructure and 1847 Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FTAI Infrastructure and 1847 Holdings LLC, you can compare the effects of market volatilities on FTAI Infrastructure and 1847 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 FTAI Infrastructure with a short position of 1847 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Infrastructure and 1847 Holdings.

Diversification Opportunities for FTAI Infrastructure and 1847 Holdings

0.34

Correlation Coefficient

FTAI Infrastructure  1847 Holdings

Weak diversification

The 3 months correlation between FTAI and 1847 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Infrastructure and 1847 Holdings LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1847 Holdings LLC and FTAI Infrastructure 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 FTAI Infrastructure are associated (or correlated) with 1847 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1847 Holdings LLC has no effect on the direction of FTAI Infrastructure i.e., FTAI Infrastructure and 1847 Holdings go up and down completely randomly.

Pair Corralation between FTAI Infrastructure and 1847 Holdings

Considering the 90-day investment horizon FTAI Infrastructure is expected to generate 2.94 times less return on investment than 1847 Holdings. But when comparing it to its historical volatility, FTAI Infrastructure is 15.71 times less risky than 1847 Holdings. It trades about 0.09 of its potential returns per unit of risk. 1847 Holdings LLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  157,560  in 1847 Holdings LLC on September 3, 2024 and sell it today you would lose (157,522) from holding 1847 Holdings LLC or give up 99.98% of portfolio value over 90 days.

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

FTAI Infrastructure  vs.  1847 Holdings LLC

FTAI Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FTAI Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, FTAI Infrastructure is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

1847 Holdings LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1847 Holdings LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with FTAI Infrastructure and 1847 Holdings

The main advantage of trading using opposite FTAI Infrastructure and 1847 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Infrastructure position performs unexpectedly, 1847 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 1847 Holdings will offset losses from the drop in 1847 Holdings' long position.

The idea behind FTAI Infrastructure and 1847 Holdings LLC 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.