Correlation Between 17136MAA0 and FTAI Aviation

Can any of the company-specific risk be diversified away by investing in both 17136MAA0 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 17136MAA0 and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CHD 23 15 DEC 31 and FTAI Aviation Ltd, you can compare the effects of market volatilities on 17136MAA0 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 17136MAA0 with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of 17136MAA0 and FTAI Aviation.

Diversification Opportunities for 17136MAA0 and FTAI Aviation

-0.6

Correlation Coefficient

17136MAA0  FTAI Aviation

Excellent diversification

The 3 months correlation between 17136MAA0 and FTAI is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CHD 23 15 DEC 31 and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and 17136MAA0 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 CHD 23 15 DEC 31 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 17136MAA0 i.e., 17136MAA0 and FTAI Aviation go up and down completely randomly.

Pair Corralation between 17136MAA0 and FTAI Aviation

Assuming the 90 days trading horizon 17136MAA0 is expected to generate 3.1 times less return on investment than FTAI Aviation. But when comparing it to its historical volatility, CHD 23 15 DEC 31 is 1.02 times less risky than FTAI Aviation. It trades about 0.02 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,463  in FTAI Aviation Ltd on October 13, 2024 and sell it today you would earn a total of  197.00  from holding FTAI Aviation Ltd or generate 8.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	74.13%
Values	Daily Returns

CHD 23 15 DEC 31  vs.  FTAI Aviation Ltd

CHD 23 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHD 23 15 DEC 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 17136MAA0 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

FTAI Aviation

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FTAI Aviation Ltd are ranked lower than 3 (%) 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 recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with 17136MAA0 and FTAI Aviation

The main advantage of trading using opposite 17136MAA0 and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 17136MAA0 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 CHD 23 15 DEC 31 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.