Correlation Between FTAI Aviation and Triton International
Can any of the company-specific risk be diversified away by investing in both FTAI Aviation and Triton International 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 Triton International 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 Triton International Limited, you can compare the effects of market volatilities on FTAI Aviation and Triton International 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 Triton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Aviation and Triton International.
Diversification Opportunities for FTAI Aviation and Triton International
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FTAI and Triton is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International 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 Triton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triton International has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Triton International go up and down completely randomly.
Pair Corralation between FTAI Aviation and Triton International
Assuming the 90 days horizon FTAI Aviation Ltd is expected to generate 5.14 times more return on investment than Triton International. However, FTAI Aviation is 5.14 times more volatile than Triton International Limited. It trades about 0.13 of its potential returns per unit of risk. Triton International Limited is currently generating about -0.01 per unit of risk. If you would invest 2,705 in FTAI Aviation Ltd on August 31, 2024 and sell it today you would earn a total of 83.00 from holding FTAI Aviation Ltd or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAI Aviation Ltd vs. Triton International Limited
Performance |
| Timeline |
| FTAI Aviation |
| Triton International |
FTAI Aviation and Triton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Aviation and Triton International
The main advantage of trading using opposite FTAI Aviation and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Aviation position performs unexpectedly, Triton International 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 Triton International will offset losses from the drop in Triton International's long position.| FTAI Aviation vs. Commonwealth Bank of | FTAI Aviation vs. East Africa Metals | FTAI Aviation vs. Arrow Financial | FTAI Aviation vs. LithiumBank Resources Corp |
| Triton International vs. Triton International Limited | Triton International vs. Triton International Limited | Triton International vs. Triton International Limited | Triton International vs. Costamare |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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