Correlation Between FTAI Infrastructure and Westport Fuel
Can any of the company-specific risk be diversified away by investing in both FTAI Infrastructure and Westport Fuel 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 Westport Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAI Infrastructure and Westport Fuel Systems, you can compare the effects of market volatilities on FTAI Infrastructure and Westport Fuel 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 Westport Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Infrastructure and Westport Fuel.
Diversification Opportunities for FTAI Infrastructure and Westport Fuel
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FTAI and Westport is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Infrastructure and Westport Fuel Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westport Fuel Systems 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 Westport Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westport Fuel Systems has no effect on the direction of FTAI Infrastructure i.e., FTAI Infrastructure and Westport Fuel go up and down completely randomly.
Pair Corralation between FTAI Infrastructure and Westport Fuel
Considering the 90-day investment horizon FTAI Infrastructure is expected to under-perform the Westport Fuel. In addition to that, FTAI Infrastructure is 1.53 times more volatile than Westport Fuel Systems. It trades about 0.0 of its total potential returns per unit of risk. Westport Fuel Systems is currently generating about 0.14 per unit of volatility. If you would invest 423.00 in Westport Fuel Systems on August 30, 2024 and sell it today you would earn a total of 27.00 from holding Westport Fuel Systems or generate 6.38% 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. Westport Fuel Systems
Performance |
| Timeline |
| FTAI Infrastructure |
| Westport Fuel Systems |
FTAI Infrastructure and Westport Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Infrastructure and Westport Fuel
The main advantage of trading using opposite FTAI Infrastructure and Westport Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Infrastructure position performs unexpectedly, Westport Fuel 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 Westport Fuel will offset losses from the drop in Westport Fuel'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 |
| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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