Correlation Between FTAI Aviation and Radcom
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and Radcom 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 Radcom 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 Radcom, you can compare the effects of market volatilities on FTAI Aviation and Radcom 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 Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and Radcom.
Diversification Opportunities for FTAI Aviation and Radcom
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FTAI and Radcom is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom 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 Radcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radcom has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Radcom go up and down completely randomly.
Pair Corralation between FTAI Aviation and Radcom
Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 0.48 times more return on investment than Radcom. However, FTAI Aviation Ltd is 2.08 times less risky than Radcom. It trades about 0.06 of its potential returns per unit of risk. Radcom is currently generating about 0.03 per unit of risk. If you would invest 2,121 in FTAI Aviation Ltd on September 2, 2024 and sell it today you would earn a total of 667.00 from holding FTAI Aviation Ltd or generate 31.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.1% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. Radcom
Performance |
| Timeline |
| FTAI Aviation |
| Radcom |
FTAI Aviation and Radcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and Radcom
The main advantage of trading using opposite FTAI Aviation and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, Radcom 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 Radcom will offset losses from the drop in Radcom's long position.| FTAI Aviation vs. SunOpta | FTAI Aviation vs. Grocery Outlet Holding | FTAI Aviation vs. SNDL Inc | FTAI Aviation vs. NH Foods Ltd |
| Radcom vs. Comtech Telecommunications Corp | Radcom vs. KVH Industries | Radcom vs. Silicom | Radcom vs. Knowles Cor |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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