Correlation Between FTAI Infrastructure and Compass Diversified
Can any of the company-specific risk be diversified away by investing in both FTAI Infrastructure and Compass Diversified 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 FTAI Infrastructure and Compass Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAI Infrastructure and Compass Diversified, you can compare the effects of market volatilities on FTAI Infrastructure and Compass Diversified 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 FTAI Infrastructure with a short position of Compass Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Infrastructure and Compass Diversified.
Diversification Opportunities for FTAI Infrastructure and Compass Diversified
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FTAI and Compass is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Infrastructure and Compass Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Diversified and FTAI Infrastructure 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 FTAI Infrastructure are associated (or correlated) with Compass Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Diversified has no effect on the direction of FTAI Infrastructure i.e., FTAI Infrastructure and Compass Diversified go up and down completely randomly.
Pair Corralation between FTAI Infrastructure and Compass Diversified
Considering the 90-day investment horizon FTAI Infrastructure is expected to generate 2.5 times more return on investment than Compass Diversified. However, FTAI Infrastructure is 2.5 times more volatile than Compass Diversified. It trades about 0.09 of its potential returns per unit of risk. Compass Diversified is currently generating about 0.02 per unit of risk. If you would invest 285.00 in FTAI Infrastructure on August 27, 2024 and sell it today you would earn a total of 562.00 from holding FTAI Infrastructure or generate 197.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAI Infrastructure vs. Compass Diversified
Performance |
| Timeline |
| FTAI Infrastructure |
| Compass Diversified |
FTAI Infrastructure and Compass Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Infrastructure and Compass Diversified
The main advantage of trading using opposite FTAI Infrastructure and Compass Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Infrastructure position performs unexpectedly, Compass Diversified 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 Compass Diversified will offset losses from the drop in Compass Diversified's long position.| FTAI Infrastructure vs. Steel Partners Holdings | FTAI Infrastructure vs. Brookfield Business Partners | FTAI Infrastructure vs. Griffon | FTAI Infrastructure vs. Tejon Ranch Co |
| Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Tejon Ranch Co | Compass Diversified vs. Brookfield Business Partners |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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