Correlation Between Aarons and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Aarons 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 Aarons and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Aarons and FTAI Aviation Ltd, you can compare the effects of market volatilities on Aarons 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 Aarons with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aarons and FTAI Aviation.
Diversification Opportunities for Aarons and FTAI Aviation
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aarons and FTAI is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Aarons and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Aarons 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 The Aarons 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 Aarons i.e., Aarons and FTAI Aviation go up and down completely randomly.
Pair Corralation between Aarons and FTAI Aviation
If you would invest 2,703 in FTAI Aviation Ltd on August 28, 2024 and sell it today you would earn a total of 15.00 from holding FTAI Aviation Ltd or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
The Aarons vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| FTAI Aviation |
Aarons and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aarons and FTAI Aviation
The main advantage of trading using opposite Aarons and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aarons 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.| Aarons vs. Custom Truck One | Aarons vs. PROG Holdings | Aarons vs. McGrath RentCorp | Aarons vs. HE Equipment Services |
| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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