Correlation Between FTAI Aviation and Air Lease
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and Air Lease 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 Aviation and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAI Aviation Ltd and Air Lease, you can compare the effects of market volatilities on FTAI Aviation and Air Lease 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 Aviation with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and Air Lease.
Diversification Opportunities for FTAI Aviation and Air Lease
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FTAI and Air is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and FTAI Aviation 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 Aviation Ltd are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Air Lease go up and down completely randomly.
Pair Corralation between FTAI Aviation and Air Lease
Assuming the 90 days horizon FTAI Aviation is expected to generate 11.37 times less return on investment than Air Lease. But when comparing it to its historical volatility, FTAI Aviation Ltd is 1.9 times less risky than Air Lease. It trades about 0.06 of its potential returns per unit of risk. Air Lease is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 4,396 in Air Lease on August 24, 2024 and sell it today you would earn a total of 584.00 from holding Air Lease or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. Air Lease
Performance |
| Timeline |
| FTAI Aviation |
| Air Lease |
FTAI Aviation and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and Air Lease
The main advantage of trading using opposite FTAI Aviation and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| FTAI Aviation vs. Antero Midstream Partners | FTAI Aviation vs. BRP Inc | FTAI Aviation vs. Canlan Ice Sports | FTAI Aviation vs. Alliant Energy Corp |
| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |