Correlation Between Mega Matrix and FTAI Infrastructure

Can any of the company-specific risk be diversified away by investing in both Mega Matrix and FTAI Infrastructure 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 Mega Matrix and FTAI Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mega Matrix Corp and FTAI Infrastructure, you can compare the effects of market volatilities on Mega Matrix and FTAI Infrastructure 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 Mega Matrix with a short position of FTAI Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Matrix and FTAI Infrastructure.

Diversification Opportunities for Mega Matrix and FTAI Infrastructure

-0.67

Correlation Coefficient

Mega Matrix  FTAI Infrastructure

Excellent diversification

The 3 months correlation between Mega and FTAI is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mega Matrix Corp and FTAI Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Infrastructure and Mega Matrix 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 Mega Matrix Corp are associated (or correlated) with FTAI Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Infrastructure has no effect on the direction of Mega Matrix i.e., Mega Matrix and FTAI Infrastructure go up and down completely randomly.

Pair Corralation between Mega Matrix and FTAI Infrastructure

Considering the 90-day investment horizon Mega Matrix Corp is expected to generate 1.98 times more return on investment than FTAI Infrastructure. However, Mega Matrix is 1.98 times more volatile than FTAI Infrastructure. It trades about 0.11 of its potential returns per unit of risk. FTAI Infrastructure is currently generating about -0.1 per unit of risk. If you would invest  125.00  in Mega Matrix Corp on September 19, 2024 and sell it today you would earn a total of  42.00  from holding Mega Matrix Corp or generate 33.6% return on investment over 90 days.

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

Mega Matrix Corp  vs.  FTAI Infrastructure

Mega Matrix Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mega Matrix Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Mega Matrix unveiled solid returns over the last few months and may actually be approaching a breakup point.

FTAI Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FTAI Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Mega Matrix and FTAI Infrastructure

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

The idea behind Mega Matrix Corp and FTAI Infrastructure 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.