Correlation Between Fortress Transportation and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Fortress Transportation and FTAI Aviation 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 Fortress Transportation and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transportation and and FTAI Aviation Ltd, you can compare the effects of market volatilities on Fortress Transportation and FTAI Aviation 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 Fortress Transportation with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transportation and FTAI Aviation.
Diversification Opportunities for Fortress Transportation and FTAI Aviation
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortress and FTAI is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transportation and and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Fortress Transportation 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 Fortress Transportation and are associated (or correlated) with FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of Fortress Transportation i.e., Fortress Transportation and FTAI Aviation go up and down completely randomly.
Pair Corralation between Fortress Transportation and FTAI Aviation
Assuming the 90 days horizon Fortress Transportation is expected to generate 3.78 times less return on investment than FTAI Aviation. But when comparing it to its historical volatility, Fortress Transportation and is 1.51 times less risky than FTAI Aviation. It trades about 0.05 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,710 in FTAI Aviation Ltd on August 30, 2024 and sell it today you would earn a total of 78.00 from holding FTAI Aviation Ltd or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Transportation and vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Fortress Transportation |
| FTAI Aviation |
Fortress Transportation and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Transportation and FTAI Aviation
The main advantage of trading using opposite Fortress Transportation and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transportation position performs unexpectedly, FTAI Aviation 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 FTAI Aviation will offset losses from the drop in FTAI Aviation's long position.| Fortress Transportation vs. Fortress Transportation and | Fortress Transportation vs. SiriusPoint | Fortress Transportation vs. New York Mortgage | Fortress Transportation vs. Compass Diversified |
| FTAI Aviation vs. Volaris | FTAI Aviation vs. Playa Hotels Resorts | FTAI Aviation vs. American Airlines Group | FTAI Aviation vs. Playtika Holding Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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