Correlation Between Nextracker and FTAI Infrastructure
Can any of the company-specific risk be diversified away by investing in both Nextracker and FTAI Infrastructure 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 Nextracker and FTAI Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextracker Class A and FTAI Infrastructure, you can compare the effects of market volatilities on Nextracker and FTAI Infrastructure 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 Nextracker with a short position of FTAI Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextracker and FTAI Infrastructure.
Diversification Opportunities for Nextracker and FTAI Infrastructure
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nextracker and FTAI is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nextracker Class A and FTAI Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Infrastructure and Nextracker 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 Nextracker Class A are associated (or correlated) with FTAI Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Infrastructure has no effect on the direction of Nextracker i.e., Nextracker and FTAI Infrastructure go up and down completely randomly.
Pair Corralation between Nextracker and FTAI Infrastructure
Considering the 90-day investment horizon Nextracker is expected to generate 1.34 times less return on investment than FTAI Infrastructure. In addition to that, Nextracker is 1.18 times more volatile than FTAI Infrastructure. It trades about 0.04 of its total potential returns per unit of risk. FTAI Infrastructure is currently generating about 0.07 per unit of volatility. If you would invest 311.00 in FTAI Infrastructure on November 2, 2024 and sell it today you would earn a total of 394.00 from holding FTAI Infrastructure or generate 126.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Nextracker Class A vs. FTAI Infrastructure
Performance |
| Timeline |
| Nextracker Class A |
| FTAI Infrastructure |
Nextracker and FTAI Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextracker and FTAI Infrastructure
The main advantage of trading using opposite Nextracker and FTAI Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextracker position performs unexpectedly, FTAI Infrastructure 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 Infrastructure will offset losses from the drop in FTAI Infrastructure's long position.| Nextracker vs. Hunter Creek Mining | Nextracker vs. Codexis | Nextracker vs. Vulcan Materials | Nextracker vs. Ecolab Inc |
| FTAI Infrastructure vs. Steel Partners Holdings | FTAI Infrastructure vs. Brookfield Business Partners | FTAI Infrastructure vs. Griffon | FTAI Infrastructure vs. Tejon Ranch Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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