Correlation Between Air Lease and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and FTAI Aviation Ltd, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and FTAI Aviation.
Diversification Opportunities for Air Lease and FTAI Aviation
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and FTAI is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and FTAI Aviation go up and down completely randomly.
Pair Corralation between Air Lease and FTAI Aviation
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.9 times more return on investment than FTAI Aviation. However, Air Lease is 1.9 times more volatile than FTAI Aviation Ltd. It trades about 0.33 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.06 per unit of risk. If you would invest 4,396 in Air Lease on August 24, 2024 and sell it today you would earn a total of 584.00 from holding Air Lease or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Air Lease |
| FTAI Aviation |
Air Lease and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and FTAI Aviation
The main advantage of trading using opposite Air Lease and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
| FTAI Aviation vs. Antero Midstream Partners | FTAI Aviation vs. BRP Inc | FTAI Aviation vs. Canlan Ice Sports | FTAI Aviation vs. Alliant Energy Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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