Correlation Between FTAI Aviation and BCE
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and BCE 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 BCE 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 BCE Inc, you can compare the effects of market volatilities on FTAI Aviation and BCE 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 BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and BCE.
Diversification Opportunities for FTAI Aviation and BCE
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FTAI and BCE is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc 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 BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and BCE go up and down completely randomly.
Pair Corralation between FTAI Aviation and BCE
Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 1.15 times more return on investment than BCE. However, FTAI Aviation is 1.15 times more volatile than BCE Inc. It trades about 0.05 of its potential returns per unit of risk. BCE Inc is currently generating about -0.08 per unit of risk. If you would invest 2,076 in FTAI Aviation Ltd on September 22, 2024 and sell it today you would earn a total of 589.00 from holding FTAI Aviation Ltd or generate 28.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.93% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. BCE Inc
Performance |
| Timeline |
| FTAI Aviation |
| BCE Inc |
FTAI Aviation and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and BCE
The main advantage of trading using opposite FTAI Aviation and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| FTAI Aviation vs. SunOpta | FTAI Aviation vs. BBB Foods | FTAI Aviation vs. Getty Realty | FTAI Aviation vs. Olympic Steel |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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