Correlation Between Global Ship and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Global Ship 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 Global Ship and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and FTAI Aviation Ltd, you can compare the effects of market volatilities on Global Ship 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 Global Ship with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and FTAI Aviation.
Diversification Opportunities for Global Ship and FTAI Aviation
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and FTAI is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and FTAI Aviation go up and down completely randomly.
Pair Corralation between Global Ship and FTAI Aviation
Considering the 90-day investment horizon Global Ship Lease is expected to generate 3.15 times more return on investment than FTAI Aviation. However, Global Ship is 3.15 times more volatile than FTAI Aviation Ltd. It trades about 0.07 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.12 per unit of risk. If you would invest 1,719 in Global Ship Lease on August 26, 2024 and sell it today you would earn a total of 507.00 from holding Global Ship Lease or generate 29.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Global Ship Lease |
| FTAI Aviation |
Global Ship and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and FTAI Aviation
The main advantage of trading using opposite Global Ship and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship 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.| Global Ship vs. Costamare | Global Ship vs. Navios Maritime Partners | Global Ship vs. Genco Shipping Trading | Global Ship vs. Star Bulk Carriers |
| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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