Correlation Between Aldel Financial and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Aldel Financial 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 Aldel Financial and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aldel Financial II and FTAI Aviation Ltd, you can compare the effects of market volatilities on Aldel Financial 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 Aldel Financial with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and FTAI Aviation.
Diversification Opportunities for Aldel Financial and FTAI Aviation
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aldel and FTAI is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Aldel Financial 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 Aldel Financial II 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 Aldel Financial i.e., Aldel Financial and FTAI Aviation go up and down completely randomly.
Pair Corralation between Aldel Financial and FTAI Aviation
Assuming the 90 days horizon Aldel Financial is expected to generate 1037.0 times less return on investment than FTAI Aviation. But when comparing it to its historical volatility, Aldel Financial II is 6.18 times less risky than FTAI Aviation. It trades about 0.0 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,454 in FTAI Aviation Ltd on August 29, 2024 and sell it today you would earn a total of 334.00 from holding FTAI Aviation Ltd or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 21.43% |
| Values | Daily Returns |
Aldel Financial II vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Aldel Financial II |
| FTAI Aviation |
Aldel Financial and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and FTAI Aviation
The main advantage of trading using opposite Aldel Financial and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial 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.| Aldel Financial vs. Distoken Acquisition | Aldel Financial vs. Voyager Acquisition Corp | Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. YHN Acquisition I |
| FTAI Aviation vs. Volaris | FTAI Aviation vs. Playa Hotels Resorts | FTAI Aviation vs. American Airlines Group | FTAI Aviation vs. Playtika Holding 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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