Correlation Between Treasury Wine and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Treasury Wine 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 Treasury Wine and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treasury Wine Estates and FTAI Aviation Ltd, you can compare the effects of market volatilities on Treasury Wine 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 Treasury Wine with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and FTAI Aviation.
Diversification Opportunities for Treasury Wine and FTAI Aviation
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Treasury and FTAI is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Treasury Wine 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 Treasury Wine Estates 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 Treasury Wine i.e., Treasury Wine and FTAI Aviation go up and down completely randomly.
Pair Corralation between Treasury Wine and FTAI Aviation
Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the FTAI Aviation. In addition to that, Treasury Wine is 2.45 times more volatile than FTAI Aviation Ltd. It trades about -0.09 of its total potential returns per unit of risk. FTAI Aviation Ltd is currently generating about -0.05 per unit of volatility. If you would invest 2,658 in FTAI Aviation Ltd on September 14, 2024 and sell it today you would lose (33.00) from holding FTAI Aviation Ltd or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Treasury Wine Estates |
| FTAI Aviation |
Treasury Wine and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and FTAI Aviation
The main advantage of trading using opposite Treasury Wine and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine 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.| Treasury Wine vs. Pernod Ricard SA | Treasury Wine vs. Willamette Valley Vineyards | Treasury Wine vs. MGP Ingredients | Treasury Wine vs. Duckhorn Portfolio |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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