Correlation Between FTAI Aviation and NextNav Warrant
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and NextNav Warrant 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 NextNav Warrant 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 NextNav Warrant, you can compare the effects of market volatilities on FTAI Aviation and NextNav Warrant 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 NextNav Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and NextNav Warrant.
Diversification Opportunities for FTAI Aviation and NextNav Warrant
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FTAI and NextNav is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant 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 NextNav Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextNav Warrant has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and NextNav Warrant go up and down completely randomly.
Pair Corralation between FTAI Aviation and NextNav Warrant
Assuming the 90 days horizon FTAI Aviation is expected to generate 17.83 times less return on investment than NextNav Warrant. But when comparing it to its historical volatility, FTAI Aviation Ltd is 9.26 times less risky than NextNav Warrant. It trades about 0.09 of its potential returns per unit of risk. NextNav Warrant is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 90.00 in NextNav Warrant on September 12, 2024 and sell it today you would earn a total of 591.00 from holding NextNav Warrant or generate 656.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. NextNav Warrant
Performance |
| Timeline |
| FTAI Aviation |
| NextNav Warrant |
FTAI Aviation and NextNav Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and NextNav Warrant
The main advantage of trading using opposite FTAI Aviation and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, NextNav Warrant 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 NextNav Warrant will offset losses from the drop in NextNav Warrant's long position.| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
| NextNav Warrant vs. HUMANA INC | NextNav Warrant vs. Barloworld Ltd ADR | NextNav Warrant vs. Morningstar Unconstrained Allocation | NextNav Warrant vs. Thrivent High Yield |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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