Correlation Between Volcan and FTAI Aviation
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By analyzing existing cross correlation between Volcan Compania Minera and FTAI Aviation Ltd, you can compare the effects of market volatilities on Volcan 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 Volcan with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volcan and FTAI Aviation.
Diversification Opportunities for Volcan and FTAI Aviation
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Volcan and FTAI is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Volcan Compania Minera and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Volcan 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 Volcan Compania Minera 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 Volcan i.e., Volcan and FTAI Aviation go up and down completely randomly.
Pair Corralation between Volcan and FTAI Aviation
Assuming the 90 days trading horizon Volcan Compania Minera is expected to generate 4.57 times more return on investment than FTAI Aviation. However, Volcan is 4.57 times more volatile than FTAI Aviation Ltd. It trades about 0.04 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.1 per unit of risk. If you would invest 6,500 in Volcan Compania Minera on August 29, 2024 and sell it today you would earn a total of 1,600 from holding Volcan Compania Minera or generate 24.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.65% |
| Values | Daily Returns |
Volcan Compania Minera vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Volcan Compania Minera |
| FTAI Aviation |
Volcan and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volcan and FTAI Aviation
The main advantage of trading using opposite Volcan and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volcan 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.The idea behind Volcan Compania Minera and FTAI Aviation Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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