Correlation Between FTAI Aviation and Triton International

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

Diversification Opportunities for FTAI Aviation and Triton International

0.29

Correlation Coefficient

FTAI Aviation  Triton International

Modest diversification

The 3 months correlation between FTAI and Triton is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International 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 Triton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triton International has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Triton International go up and down completely randomly.

Pair Corralation between FTAI Aviation and Triton International

Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 0.79 times more return on investment than Triton International. However, FTAI Aviation Ltd is 1.27 times less risky than Triton International. It trades about 0.0 of its potential returns per unit of risk. Triton International Limited is currently generating about -0.13 per unit of risk. If you would invest  2,700  in FTAI Aviation Ltd on December 4, 2024 and sell it today you would lose (12.00) from holding FTAI Aviation Ltd or give up 0.44% of portfolio value over 90 days.

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

FTAI Aviation Ltd  vs.  Triton International Limited

FTAI Aviation

Risk-Adjusted Performance

Very Weak

Over the last 90 days FTAI Aviation Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Triton International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Triton International Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Preferred Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with FTAI Aviation and Triton International

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

The idea behind FTAI Aviation Ltd and Triton International Limited 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 Stocks Directory module to find actively traded stocks across global markets.