Correlation Between FTAI Infrastructure and Steel Partners

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

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

Diversification Opportunities for FTAI Infrastructure and Steel Partners

-0.9

Correlation Coefficient

FTAI Infrastructure  Steel Partners

Pay attention - limited upside

The 3 months correlation between FTAI and Steel is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Infrastructure and Steel Partners Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Partners Holdings 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 Steel Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Partners Holdings has no effect on the direction of FTAI Infrastructure i.e., FTAI Infrastructure and Steel Partners go up and down completely randomly.

Pair Corralation between FTAI Infrastructure and Steel Partners

Considering the 90-day investment horizon FTAI Infrastructure is expected to under-perform the Steel Partners. In addition to that, FTAI Infrastructure is 14.33 times more volatile than Steel Partners Holdings. It trades about -0.16 of its total potential returns per unit of risk. Steel Partners Holdings is currently generating about 0.14 per unit of volatility. If you would invest  2,396  in Steel Partners Holdings on December 28, 2024 and sell it today you would earn a total of  53.00  from holding Steel Partners Holdings or generate 2.21% return on investment over 90 days.

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

FTAI Infrastructure  vs.  Steel Partners Holdings

FTAI Infrastructure

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Steel Partners Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Steel Partners Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Steel Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FTAI Infrastructure and Steel Partners

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

The idea behind FTAI Infrastructure and Steel Partners Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.