Correlation Between 629377CE0 and FTAI Aviation

Can any of the company-specific risk be diversified away by investing in both 629377CE0 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 629377CE0 and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NRG Energy 575 and FTAI Aviation Ltd, you can compare the effects of market volatilities on 629377CE0 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 629377CE0 with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of 629377CE0 and FTAI Aviation.

Diversification Opportunities for 629377CE0 and FTAI Aviation

-0.23

Correlation Coefficient

629377CE0  FTAI Aviation

Very good diversification

The 3 months correlation between 629377CE0 and FTAI is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding NRG Energy 575 and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and 629377CE0 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 NRG Energy 575 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 629377CE0 i.e., 629377CE0 and FTAI Aviation go up and down completely randomly.

Pair Corralation between 629377CE0 and FTAI Aviation

Assuming the 90 days trading horizon 629377CE0 is expected to generate 11.88 times less return on investment than FTAI Aviation. But when comparing it to its historical volatility, NRG Energy 575 is 1.98 times less risky than FTAI Aviation. It trades about 0.01 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,311  in FTAI Aviation Ltd on October 9, 2024 and sell it today you would earn a total of  342.00  from holding FTAI Aviation Ltd or generate 14.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

NRG Energy 575  vs.  FTAI Aviation Ltd

NRG Energy 575

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NRG Energy 575 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 629377CE0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with 629377CE0 and FTAI Aviation

The main advantage of trading using opposite 629377CE0 and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 629377CE0 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 NRG Energy 575 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.