Correlation Between FTAI Aviation and AviChina Industry
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and AviChina Industry 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 AviChina Industry 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 AviChina Industry Technology, you can compare the effects of market volatilities on FTAI Aviation and AviChina Industry 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 AviChina Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and AviChina Industry.
Diversification Opportunities for FTAI Aviation and AviChina Industry
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FTAI and AviChina is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and AviChina Industry Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AviChina Industry 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 AviChina Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AviChina Industry has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and AviChina Industry go up and down completely randomly.
Pair Corralation between FTAI Aviation and AviChina Industry
Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 0.27 times more return on investment than AviChina Industry. However, FTAI Aviation Ltd is 3.76 times less risky than AviChina Industry. It trades about 0.09 of its potential returns per unit of risk. AviChina Industry Technology is currently generating about 0.01 per unit of risk. If you would invest 2,147 in FTAI Aviation Ltd on September 12, 2024 and sell it today you would earn a total of 484.00 from holding FTAI Aviation Ltd or generate 22.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. AviChina Industry Technology
Performance |
| Timeline |
| FTAI Aviation |
| AviChina Industry |
FTAI Aviation and AviChina Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and AviChina Industry
The main advantage of trading using opposite FTAI Aviation and AviChina Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, AviChina Industry 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 AviChina Industry will offset losses from the drop in AviChina Industry's long position.| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
| AviChina Industry vs. John Wiley Sons | AviChina Industry vs. Ultra Clean Holdings | AviChina Industry vs. AMREP | AviChina Industry vs. 17 Education Technology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |