Correlation Between FTAI Aviation and Aldel Financial
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and Aldel Financial 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 Aldel Financial 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 Aldel Financial II, you can compare the effects of market volatilities on FTAI Aviation and Aldel Financial 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 Aldel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and Aldel Financial.
Diversification Opportunities for FTAI Aviation and Aldel Financial
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FTAI and Aldel is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II 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 Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Aldel Financial go up and down completely randomly.
Pair Corralation between FTAI Aviation and Aldel Financial
Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 11.68 times more return on investment than Aldel Financial. However, FTAI Aviation is 11.68 times more volatile than Aldel Financial II. It trades about 0.05 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.11 per unit of risk. If you would invest 2,121 in FTAI Aviation Ltd on August 26, 2024 and sell it today you would earn a total of 629.00 from holding FTAI Aviation Ltd or generate 29.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.77% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. Aldel Financial II
Performance |
| Timeline |
| FTAI Aviation |
| Aldel Financial II |
FTAI Aviation and Aldel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and Aldel Financial
The main advantage of trading using opposite FTAI Aviation and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, Aldel Financial 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 Aldel Financial will offset losses from the drop in Aldel Financial's long position.| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
| Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. Vine Hill Capital | Aldel Financial vs. DP Cap Acquisition | Aldel Financial vs. PowerUp Acquisition 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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