Correlation Between Willscot Mobile and FTAI Aviation

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

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

Diversification Opportunities for Willscot Mobile and FTAI Aviation

-0.19

Correlation Coefficient

Willscot Mobile  FTAI Aviation

Good diversification

The 3 months correlation between Willscot and FTAI is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Willscot Mobile Mini and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Willscot Mobile 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 Willscot Mobile Mini 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 Willscot Mobile i.e., Willscot Mobile and FTAI Aviation go up and down completely randomly.

Pair Corralation between Willscot Mobile and FTAI Aviation

Considering the 90-day investment horizon Willscot Mobile is expected to generate 1.46 times less return on investment than FTAI Aviation. In addition to that, Willscot Mobile is 3.9 times more volatile than FTAI Aviation Ltd. It trades about 0.03 of its total potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.16 per unit of volatility. If you would invest  2,574  in FTAI Aviation Ltd on September 2, 2024 and sell it today you would earn a total of  214.00  from holding FTAI Aviation Ltd or generate 8.31% return on investment over 90 days.

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

Willscot Mobile Mini  vs.  FTAI Aviation Ltd

Willscot Mobile Mini

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Willscot Mobile Mini are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Willscot Mobile is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

FTAI Aviation

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FTAI Aviation Ltd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward indicators, FTAI Aviation may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Willscot Mobile and FTAI Aviation

The main advantage of trading using opposite Willscot Mobile and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willscot Mobile 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 Willscot Mobile Mini 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.