Correlation Between Tianjin Capital and FTAI Aviation

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

By analyzing existing cross correlation between Tianjin Capital Environmental and FTAI Aviation Ltd, you can compare the effects of market volatilities on Tianjin Capital and FTAI Aviation 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 Tianjin Capital with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and FTAI Aviation.

Diversification Opportunities for Tianjin Capital and FTAI Aviation

0.75

Correlation Coefficient

Tianjin Capital  FTAI Aviation

Poor diversification

The 3 months correlation between Tianjin and FTAI is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Tianjin Capital 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 Tianjin Capital Environmental are associated (or correlated) with FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and FTAI Aviation go up and down completely randomly.

Pair Corralation between Tianjin Capital and FTAI Aviation

If you would invest  38.00  in Tianjin Capital Environmental on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Tianjin Capital Environmental or generate 0.0% return on investment over 90 days.

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

Tianjin Capital Environmental  vs.  FTAI Aviation Ltd

Tianjin Capital Envi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Capital Environmental are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting forward indicators, Tianjin Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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.

Pair Trading with Tianjin Capital and FTAI Aviation

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

The idea behind Tianjin Capital Environmental and FTAI Aviation Ltd 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.