Correlation Between Fortress Transp and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Fortress Transp 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 Fortress Transp and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transp Infra and FTAI Aviation Ltd, you can compare the effects of market volatilities on Fortress Transp 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 Fortress Transp with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and FTAI Aviation.
Diversification Opportunities for Fortress Transp and FTAI Aviation
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fortress and FTAI is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Fortress Transp 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 Fortress Transp Infra 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 Fortress Transp i.e., Fortress Transp and FTAI Aviation go up and down completely randomly.
Pair Corralation between Fortress Transp and FTAI Aviation
Given the investment horizon of 90 days Fortress Transp Infra is expected to generate 3.51 times more return on investment than FTAI Aviation. However, Fortress Transp is 3.51 times more volatile than FTAI Aviation Ltd. It trades about 0.24 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.03 per unit of risk. If you would invest 14,224 in Fortress Transp Infra on August 28, 2024 and sell it today you would earn a total of 2,602 from holding Fortress Transp Infra or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Transp Infra vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Fortress Transp Infra |
| FTAI Aviation |
Fortress Transp and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Transp and FTAI Aviation
The main advantage of trading using opposite Fortress Transp and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp 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.| Fortress Transp vs. McGrath RentCorp | Fortress Transp vs. Custom Truck One | Fortress Transp vs. Herc Holdings | Fortress Transp vs. Alta Equipment Group |
| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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