Correlation Between FTAI Aviation and ELDORADO

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

Diversification Opportunities for FTAI Aviation and ELDORADO

-0.31

Correlation Coefficient

FTAI Aviation  ELDORADO

Very good diversification

The 3 months correlation between FTAI and ELDORADO is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and ELDORADO RESORTS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELDORADO RESORTS INC 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 ELDORADO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELDORADO RESORTS INC has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and ELDORADO go up and down completely randomly.

Pair Corralation between FTAI Aviation and ELDORADO

Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 4.74 times more return on investment than ELDORADO. However, FTAI Aviation is 4.74 times more volatile than ELDORADO RESORTS INC. It trades about 0.08 of its potential returns per unit of risk. ELDORADO RESORTS INC is currently generating about 0.02 per unit of risk. If you would invest  2,368  in FTAI Aviation Ltd on October 9, 2024 and sell it today you would earn a total of  285.00  from holding FTAI Aviation Ltd or generate 12.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.01%
Values	Daily Returns

FTAI Aviation Ltd  vs.  ELDORADO RESORTS INC

FTAI Aviation

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FTAI Aviation Ltd are ranked lower than 6 (%) 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 current stock price disarray, may contribute to short-term losses for the investors.

ELDORADO RESORTS INC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ELDORADO RESORTS INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ELDORADO 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 Aviation and ELDORADO

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

The idea behind FTAI Aviation Ltd and ELDORADO RESORTS INC 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.