Correlation Between FTAI Aviation and Atacado SA
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and Atacado SA 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 Atacado SA 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 Atacado SA, you can compare the effects of market volatilities on FTAI Aviation and Atacado SA 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 Atacado SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and Atacado SA.
Diversification Opportunities for FTAI Aviation and Atacado SA
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FTAI and Atacado is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Atacado SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacado SA 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 Atacado SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacado SA has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Atacado SA go up and down completely randomly.
Pair Corralation between FTAI Aviation and Atacado SA
Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 22.05 times more return on investment than Atacado SA. However, FTAI Aviation is 22.05 times more volatile than Atacado SA. It trades about 0.06 of its potential returns per unit of risk. Atacado SA is currently generating about 0.14 per unit of risk. If you would invest 2,121 in FTAI Aviation Ltd on September 3, 2024 and sell it today you would earn a total of 667.00 from holding FTAI Aviation Ltd or generate 31.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 32.72% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. Atacado SA
Performance |
| Timeline |
| FTAI Aviation |
| Atacado SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FTAI Aviation and Atacado SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and Atacado SA
The main advantage of trading using opposite FTAI Aviation and Atacado SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, Atacado SA 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 Atacado SA will offset losses from the drop in Atacado SA's long position.| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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