Correlation Between China Aircraft and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both China Aircraft 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 China Aircraft and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Aircraft Leasing and FTAI Aviation Ltd, you can compare the effects of market volatilities on China Aircraft 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 China Aircraft with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aircraft and FTAI Aviation.
Diversification Opportunities for China Aircraft and FTAI Aviation
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and FTAI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and China Aircraft 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 China Aircraft Leasing 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 China Aircraft i.e., China Aircraft and FTAI Aviation go up and down completely randomly.
Pair Corralation between China Aircraft and FTAI Aviation
Assuming the 90 days horizon China Aircraft Leasing is expected to generate 8.38 times more return on investment than FTAI Aviation. However, China Aircraft is 8.38 times more volatile than FTAI Aviation Ltd. It trades about 0.13 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.15 per unit of risk. If you would invest 19.00 in China Aircraft Leasing on August 29, 2024 and sell it today you would earn a total of 21.00 from holding China Aircraft Leasing or generate 110.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Aircraft Leasing vs. FTAI Aviation Ltd
Performance |
| Timeline |
| China Aircraft Leasing |
| FTAI Aviation |
China Aircraft and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aircraft and FTAI Aviation
The main advantage of trading using opposite China Aircraft and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft 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.| China Aircraft vs. Yuexiu Transport Infrastructure | China Aircraft vs. Ihuman Inc | China Aircraft vs. One Liberty Properties | China Aircraft vs. Hafnia 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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