Correlation Between Fortress Transp and FTAI Infrastructure

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

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

Diversification Opportunities for Fortress Transp and FTAI Infrastructure

0.5

Correlation Coefficient

Fortress Transp  FTAI Infrastructure

Very weak diversification

The 3 months correlation between Fortress and FTAI is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra and FTAI Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Infrastructure and Fortress Transp 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 Fortress Transp Infra 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 Fortress Transp i.e., Fortress Transp and FTAI Infrastructure go up and down completely randomly.

Pair Corralation between Fortress Transp and FTAI Infrastructure

Given the investment horizon of 90 days Fortress Transp is expected to generate 1.11 times less return on investment than FTAI Infrastructure. In addition to that, Fortress Transp is 1.24 times more volatile than FTAI Infrastructure. It trades about 0.13 of its total potential returns per unit of risk. FTAI Infrastructure is currently generating about 0.19 per unit of volatility. If you would invest  437.00  in FTAI Infrastructure on May 5, 2025 and sell it today you would earn a total of  196.00  from holding FTAI Infrastructure or generate 44.85% return on investment over 90 days.

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

Fortress Transp Infra  vs.  FTAI Infrastructure

Fortress Transp Infra

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Transp Infra are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Fortress Transp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

FTAI Infrastructure

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FTAI Infrastructure are ranked lower than 14 (%) 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.

Pair Trading with Fortress Transp and FTAI Infrastructure

The main advantage of trading using opposite Fortress Transp and FTAI Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp 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.

The idea behind Fortress Transp Infra and FTAI Infrastructure 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.