Correlation Between BCE and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both BCE 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 BCE and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and FTAI Aviation Ltd, you can compare the effects of market volatilities on BCE 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 BCE with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and FTAI Aviation.
Diversification Opportunities for BCE and FTAI Aviation
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BCE and FTAI is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and BCE 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 BCE Inc 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 BCE i.e., BCE and FTAI Aviation go up and down completely randomly.
Pair Corralation between BCE and FTAI Aviation
Considering the 90-day investment horizon BCE Inc is expected to under-perform the FTAI Aviation. In addition to that, BCE is 1.81 times more volatile than FTAI Aviation Ltd. It trades about -0.14 of its total potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.05 per unit of volatility. If you would invest 2,562 in FTAI Aviation Ltd on December 10, 2024 and sell it today you would earn a total of 123.00 from holding FTAI Aviation Ltd or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCE Inc vs. FTAI Aviation Ltd
Performance |
| Timeline |
| BCE Inc |
| FTAI Aviation |
BCE and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and FTAI Aviation
The main advantage of trading using opposite BCE and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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.| BCE vs. Rogers Communications | BCE vs. America Movil SAB | BCE vs. Telus Corp | BCE vs. Telefonica Brasil SA |
| FTAI Aviation vs. BCE Inc | FTAI Aviation vs. Pinterest | FTAI Aviation vs. United Airlines Holdings | FTAI Aviation vs. Nok Airlines Public |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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