Correlation Between FTAI Aviation and Joint Stock

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

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

Diversification Opportunities for FTAI Aviation and Joint Stock

-0.05

Correlation Coefficient

FTAI Aviation  Joint Stock

Good diversification

The 3 months correlation between FTAI and Joint is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Joint Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Stock and FTAI Aviation 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 Aviation Ltd are associated (or correlated) with Joint Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Stock has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Joint Stock go up and down completely randomly.

Pair Corralation between FTAI Aviation and Joint Stock

Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 0.56 times more return on investment than Joint Stock. However, FTAI Aviation Ltd is 1.78 times less risky than Joint Stock. It trades about 0.09 of its potential returns per unit of risk. Joint Stock is currently generating about -0.11 per unit of risk. If you would invest  2,603  in FTAI Aviation Ltd on October 6, 2024 and sell it today you would earn a total of  96.00  from holding FTAI Aviation Ltd or generate 3.69% return on investment over 90 days.

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

FTAI Aviation Ltd  vs.  Joint Stock

FTAI Aviation

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FTAI Aviation Ltd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, FTAI Aviation is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Joint Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Joint Stock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Joint Stock is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with FTAI Aviation and Joint Stock

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

The idea behind FTAI Aviation Ltd and Joint Stock 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.