Correlation Between FTAI Aviation and Q2 Holdings
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and Q2 Holdings 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 Q2 Holdings 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 Q2 Holdings, you can compare the effects of market volatilities on FTAI Aviation and Q2 Holdings 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 Q2 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and Q2 Holdings.
Diversification Opportunities for FTAI Aviation and Q2 Holdings
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FTAI and QTWO is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Q2 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2 Holdings 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 Q2 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2 Holdings has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Q2 Holdings go up and down completely randomly.
Pair Corralation between FTAI Aviation and Q2 Holdings
Assuming the 90 days horizon FTAI Aviation is expected to generate 5.44 times less return on investment than Q2 Holdings. But when comparing it to its historical volatility, FTAI Aviation Ltd is 4.1 times less risky than Q2 Holdings. It trades about 0.13 of its potential returns per unit of risk. Q2 Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,360 in Q2 Holdings on September 1, 2024 and sell it today you would earn a total of 7,114 from holding Q2 Holdings or generate 211.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. Q2 Holdings
Performance |
| Timeline |
| FTAI Aviation |
| Q2 Holdings |
FTAI Aviation and Q2 Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and Q2 Holdings
The main advantage of trading using opposite FTAI Aviation and Q2 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, Q2 Holdings 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 Q2 Holdings will offset losses from the drop in Q2 Holdings' long position.| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
| Q2 Holdings vs. Ke Holdings | Q2 Holdings vs. nCino Inc | Q2 Holdings vs. Kingsoft Cloud Holdings | Q2 Holdings vs. Jfrog |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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