Correlation Between Alta Equipment and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Alta Equipment 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 Alta Equipment and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alta Equipment Group and FTAI Aviation Ltd, you can compare the effects of market volatilities on Alta Equipment 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 Alta Equipment with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and FTAI Aviation.
Diversification Opportunities for Alta Equipment and FTAI Aviation
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alta and FTAI is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Alta Equipment 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 Alta Equipment Group 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 Alta Equipment i.e., Alta Equipment and FTAI Aviation go up and down completely randomly.
Pair Corralation between Alta Equipment and FTAI Aviation
Assuming the 90 days trading horizon Alta Equipment is expected to generate 1.27 times less return on investment than FTAI Aviation. In addition to that, Alta Equipment is 1.36 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 0.06 per unit of volatility. If you would invest 2,121 in FTAI Aviation Ltd on August 30, 2024 and sell it today you would earn a total of 667.00 from holding FTAI Aviation Ltd or generate 31.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.78% |
| Values | Daily Returns |
Alta Equipment Group vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Alta Equipment Group |
| FTAI Aviation |
Alta Equipment and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and FTAI Aviation
The main advantage of trading using opposite Alta Equipment and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment 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.| Alta Equipment vs. Triton International Limited | Alta Equipment vs. Babcock Wilcox Enterprises | Alta Equipment vs. Triton International Limited | Alta Equipment vs. Triton International Limited |
| 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |