Correlation Between FTAI Aviation and Where Food

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

Diversification Opportunities for FTAI Aviation and Where Food

0.69

Correlation Coefficient

FTAI Aviation  Where Food

Poor diversification

The 3 months correlation between FTAI and Where is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes 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 Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Where Food go up and down completely randomly.

Pair Corralation between FTAI Aviation and Where Food

Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 0.58 times more return on investment than Where Food. However, FTAI Aviation Ltd is 1.73 times less risky than Where Food. It trades about 0.05 of its potential returns per unit of risk. Where Food Comes is currently generating about 0.01 per unit of risk. If you would invest  2,076  in FTAI Aviation Ltd on October 1, 2024 and sell it today you would earn a total of  603.00  from holding FTAI Aviation Ltd or generate 29.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.0%
Values	Daily Returns

FTAI Aviation Ltd  vs.  Where Food Comes

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

Where Food Comes

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Where Food reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FTAI Aviation and Where Food

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

The idea behind FTAI Aviation Ltd and Where Food Comes 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.