Correlation Between FTAI Aviation and HUTCHMED DRC
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and HUTCHMED DRC 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 HUTCHMED DRC 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 HUTCHMED DRC, you can compare the effects of market volatilities on FTAI Aviation and HUTCHMED DRC 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 HUTCHMED DRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and HUTCHMED DRC.
Diversification Opportunities for FTAI Aviation and HUTCHMED DRC
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between FTAI and HUTCHMED is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and HUTCHMED DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHMED DRC 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 HUTCHMED DRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHMED DRC has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and HUTCHMED DRC go up and down completely randomly.
Pair Corralation between FTAI Aviation and HUTCHMED DRC
Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 0.17 times more return on investment than HUTCHMED DRC. However, FTAI Aviation Ltd is 6.05 times less risky than HUTCHMED DRC. It trades about 0.13 of its potential returns per unit of risk. HUTCHMED DRC is currently generating about 0.01 per unit of risk. If you would invest 2,270 in FTAI Aviation Ltd on August 25, 2024 and sell it today you would earn a total of 480.00 from holding FTAI Aviation Ltd or generate 21.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. HUTCHMED DRC
Performance |
| Timeline |
| FTAI Aviation |
| HUTCHMED DRC |
FTAI Aviation and HUTCHMED DRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and HUTCHMED DRC
The main advantage of trading using opposite FTAI Aviation and HUTCHMED DRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, HUTCHMED DRC 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 HUTCHMED DRC will offset losses from the drop in HUTCHMED DRC's long position.| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
| HUTCHMED DRC vs. Capricor Therapeutics | HUTCHMED DRC vs. Akari Therapeutics PLC | HUTCHMED DRC vs. Soleno Therapeutics | HUTCHMED DRC vs. Bio Path Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Global Correlations Find global opportunities by holding instruments from different markets |