Correlation Between Alliance Global and FTAI Infrastructure
Can any of the company-specific risk be diversified away by investing in both Alliance Global and FTAI Infrastructure 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 Alliance Global and FTAI Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Global Group and FTAI Infrastructure, you can compare the effects of market volatilities on Alliance Global and FTAI Infrastructure 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 Alliance Global with a short position of FTAI Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Global and FTAI Infrastructure.
Diversification Opportunities for Alliance Global and FTAI Infrastructure
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alliance and FTAI is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Global Group and FTAI Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Infrastructure and Alliance Global 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 Alliance Global Group are associated (or correlated) with FTAI Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Infrastructure has no effect on the direction of Alliance Global i.e., Alliance Global and FTAI Infrastructure go up and down completely randomly.
Pair Corralation between Alliance Global and FTAI Infrastructure
Assuming the 90 days horizon Alliance Global Group is expected to under-perform the FTAI Infrastructure. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alliance Global Group is 2.2 times less risky than FTAI Infrastructure. The pink sheet trades about -0.21 of its potential returns per unit of risk. The FTAI Infrastructure is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 897.00 in FTAI Infrastructure on August 24, 2024 and sell it today you would lose (51.00) from holding FTAI Infrastructure or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliance Global Group vs. FTAI Infrastructure
Performance |
| Timeline |
| Alliance Global Group |
| FTAI Infrastructure |
Alliance Global and FTAI Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Global and FTAI Infrastructure
The main advantage of trading using opposite Alliance Global and FTAI Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Global position performs unexpectedly, FTAI Infrastructure 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 Infrastructure will offset losses from the drop in FTAI Infrastructure's long position.| Alliance Global vs. Alliance Recovery | Alliance Global vs. Ayala | Alliance Global vs. Alaska Power Telephone | Alliance Global vs. RCABS Inc |
| FTAI Infrastructure vs. Steel Partners Holdings | FTAI Infrastructure vs. Brookfield Business Partners | FTAI Infrastructure vs. Griffon | FTAI Infrastructure vs. Tejon Ranch Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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