Correlation Between FTAI Aviation and Textainer Group

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

Diversification Opportunities for FTAI Aviation and Textainer Group

0.79

Correlation Coefficient

FTAI Aviation  Textainer Group

Poor diversification

The 3 months correlation between FTAI and Textainer is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Textainer Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Textainer Group Holdings 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 Textainer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Textainer Group Holdings has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Textainer Group go up and down completely randomly.

Pair Corralation between FTAI Aviation and Textainer Group

Assuming the 90 days horizon FTAI Aviation is expected to generate 2.97 times less return on investment than Textainer Group. But when comparing it to its historical volatility, FTAI Aviation Ltd is 1.3 times less risky than Textainer Group. It trades about 0.05 of its potential returns per unit of risk. Textainer Group Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,242  in Textainer Group Holdings on October 4, 2024 and sell it today you would earn a total of  849.00  from holding Textainer Group Holdings or generate 26.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	28.82%
Values	Daily Returns

FTAI Aviation Ltd  vs.  Textainer Group Holdings

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 latest stock price disarray, may contribute to short-term losses for the investors.

Textainer Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with FTAI Aviation and Textainer Group

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

The idea behind FTAI Aviation Ltd and Textainer Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.