Correlation Between Waters and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Waters 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 Waters and FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waters and FTAI Aviation Ltd, you can compare the effects of market volatilities on Waters 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 Waters with a short position of FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waters and FTAI Aviation.
Diversification Opportunities for Waters and FTAI Aviation
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Waters and FTAI is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Waters and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation and Waters 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 Waters 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 Waters i.e., Waters and FTAI Aviation go up and down completely randomly.
Pair Corralation between Waters and FTAI Aviation
Considering the 90-day investment horizon Waters is expected to generate 16.8 times less return on investment than FTAI Aviation. In addition to that, Waters is 1.86 times more volatile than FTAI Aviation Ltd. It trades about 0.01 of its total potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.24 per unit of volatility. If you would invest 2,619 in FTAI Aviation Ltd on September 4, 2024 and sell it today you would earn a total of 141.00 from holding FTAI Aviation Ltd or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waters vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Waters |
| FTAI Aviation |
Waters and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waters and FTAI Aviation
The main advantage of trading using opposite Waters and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waters 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.| Waters vs. IDEXX Laboratories | Waters vs. IQVIA Holdings | Waters vs. Charles River Laboratories | Waters vs. Revvity |
| FTAI Aviation vs. GE Vernova LLC | FTAI Aviation vs. Playtika Holding Corp | FTAI Aviation vs. Kenon Holdings | FTAI Aviation vs. Kinetik Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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