Correlation Between FTAI Aviation and Siriuspoint

Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and Siriuspoint 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 Siriuspoint 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 Siriuspoint, you can compare the effects of market volatilities on FTAI Aviation and Siriuspoint 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 Siriuspoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and Siriuspoint.

Diversification Opportunities for FTAI Aviation and Siriuspoint

0.68

Correlation Coefficient

FTAI Aviation  Siriuspoint

Poor diversification

The 3 months correlation between FTAI and Siriuspoint is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint 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 Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Siriuspoint go up and down completely randomly.

Pair Corralation between FTAI Aviation and Siriuspoint

Assuming the 90 days horizon FTAI Aviation is expected to generate 2.29 times less return on investment than Siriuspoint. But when comparing it to its historical volatility, FTAI Aviation Ltd is 1.71 times less risky than Siriuspoint. It trades about 0.07 of its potential returns per unit of risk. Siriuspoint is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  717.00  in Siriuspoint on October 5, 2024 and sell it today you would earn a total of  857.00  from holding Siriuspoint or generate 119.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.78%
Values	Daily Returns

FTAI Aviation Ltd  vs.  Siriuspoint

FTAI Aviation

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FTAI Aviation Ltd are ranked lower than 4 (%) 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 latest stock price disarray, may contribute to short-term losses for the investors.

Siriuspoint

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Siriuspoint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FTAI Aviation and Siriuspoint

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

The idea behind FTAI Aviation Ltd and Siriuspoint 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.