Correlation Between FTAI Aviation and Solventum Corp
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and Solventum Corp 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 Solventum Corp 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 Solventum Corp, you can compare the effects of market volatilities on FTAI Aviation and Solventum Corp 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 Solventum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and Solventum Corp.
Diversification Opportunities for FTAI Aviation and Solventum Corp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FTAI and Solventum is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Solventum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solventum Corp 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 Solventum Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solventum Corp has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Solventum Corp go up and down completely randomly.
Pair Corralation between FTAI Aviation and Solventum Corp
Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 0.59 times more return on investment than Solventum Corp. However, FTAI Aviation Ltd is 1.7 times less risky than Solventum Corp. It trades about 0.05 of its potential returns per unit of risk. Solventum Corp is currently generating about -0.02 per unit of risk. If you would invest 2,121 in FTAI Aviation Ltd on August 26, 2024 and sell it today you would earn a total of 629.00 from holding FTAI Aviation Ltd or generate 29.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 39.26% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. Solventum Corp
Performance |
| Timeline |
| FTAI Aviation |
| Solventum Corp |
FTAI Aviation and Solventum Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and Solventum Corp
The main advantage of trading using opposite FTAI Aviation and Solventum Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, Solventum Corp 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 Solventum Corp will offset losses from the drop in Solventum Corp's long position.| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
| Solventum Corp vs. Zoom Video Communications | Solventum Corp vs. FTAI Aviation Ltd | Solventum Corp vs. Brunswick | Solventum Corp vs. Magna International |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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