Correlation Between FTAI Infrastructure and Compass Diversified

Can any of the company-specific risk be diversified away by investing in both FTAI Infrastructure and Compass Diversified 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 FTAI Infrastructure and Compass Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FTAI Infrastructure and Compass Diversified, you can compare the effects of market volatilities on FTAI Infrastructure and Compass Diversified 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 FTAI Infrastructure with a short position of Compass Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Infrastructure and Compass Diversified.

Diversification Opportunities for FTAI Infrastructure and Compass Diversified

-0.39

Correlation Coefficient

FTAI Infrastructure  Compass Diversified

Very good diversification

The 3 months correlation between FTAI and Compass is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Infrastructure and Compass Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Diversified and FTAI Infrastructure 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 FTAI Infrastructure are associated (or correlated) with Compass Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Diversified has no effect on the direction of FTAI Infrastructure i.e., FTAI Infrastructure and Compass Diversified go up and down completely randomly.

Pair Corralation between FTAI Infrastructure and Compass Diversified

Considering the 90-day investment horizon FTAI Infrastructure is expected to generate 0.7 times more return on investment than Compass Diversified. However, FTAI Infrastructure is 1.42 times less risky than Compass Diversified. It trades about 0.2 of its potential returns per unit of risk. Compass Diversified is currently generating about -0.07 per unit of risk. If you would invest  427.00  in FTAI Infrastructure on May 1, 2025 and sell it today you would earn a total of  209.00  from holding FTAI Infrastructure or generate 48.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FTAI Infrastructure  vs.  Compass Diversified

FTAI Infrastructure

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FTAI Infrastructure are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward indicators, FTAI Infrastructure reported solid returns over the last few months and may actually be approaching a breakup point.

Compass Diversified

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compass Diversified has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Preferred Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with FTAI Infrastructure and Compass Diversified

The main advantage of trading using opposite FTAI Infrastructure and Compass Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Infrastructure position performs unexpectedly, Compass Diversified 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 Compass Diversified will offset losses from the drop in Compass Diversified's long position.

The idea behind FTAI Infrastructure and Compass Diversified 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.