Correlation Between LithiumBank Resources and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources 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 LithiumBank Resources and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LithiumBank Resources Corp and FTAI Aviation Ltd, you can compare the effects of market volatilities on LithiumBank Resources 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 LithiumBank Resources with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and FTAI Aviation.
Diversification Opportunities for LithiumBank Resources and FTAI Aviation
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LithiumBank and FTAI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and LithiumBank Resources 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 LithiumBank Resources Corp 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 LithiumBank Resources i.e., LithiumBank Resources and FTAI Aviation go up and down completely randomly.
Pair Corralation between LithiumBank Resources and FTAI Aviation
Assuming the 90 days horizon LithiumBank Resources Corp is expected to generate 16.45 times more return on investment than FTAI Aviation. However, LithiumBank Resources is 16.45 times more volatile than FTAI Aviation Ltd. It trades about 0.14 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.26 per unit of risk. If you would invest 16.00 in LithiumBank Resources Corp on November 29, 2024 and sell it today you would earn a total of 3.00 from holding LithiumBank Resources Corp or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LithiumBank Resources Corp vs. FTAI Aviation Ltd
Performance |
| Timeline |
| LithiumBank Resources |
| FTAI Aviation |
LithiumBank Resources and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LithiumBank Resources and FTAI Aviation
The main advantage of trading using opposite LithiumBank Resources and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources 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.| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Focus Graphite | LithiumBank Resources vs. Mineral Res |
| FTAI Aviation vs. Griffon | FTAI Aviation vs. Aldel Financial II | FTAI Aviation vs. Everus Construction Group | FTAI Aviation vs. Tritent International Agriculture |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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