Correlation Between FTAI Aviation and Tourmaline Bio

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

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

Diversification Opportunities for FTAI Aviation and Tourmaline Bio

0.5

Correlation Coefficient

FTAI Aviation  Tourmaline Bio

Very weak diversification

The 3 months correlation between FTAI and Tourmaline is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Aviation Ltd and Tourmaline Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Bio and FTAI Aviation 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 Aviation Ltd are associated (or correlated) with Tourmaline Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Bio has no effect on the direction of FTAI Aviation i.e., FTAI Aviation and Tourmaline Bio go up and down completely randomly.

Pair Corralation between FTAI Aviation and Tourmaline Bio

Assuming the 90 days horizon FTAI Aviation is expected to generate 32.41 times less return on investment than Tourmaline Bio. But when comparing it to its historical volatility, FTAI Aviation Ltd is 12.08 times less risky than Tourmaline Bio. It trades about 0.08 of its potential returns per unit of risk. Tourmaline Bio is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,823  in Tourmaline Bio on July 20, 2025 and sell it today you would earn a total of  2,967  from holding Tourmaline Bio or generate 162.75% return on investment over 90 days.

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

FTAI Aviation Ltd  vs.  Tourmaline Bio

FTAI Aviation

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in FTAI Aviation Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, FTAI Aviation is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Tourmaline Bio

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tourmaline Bio are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite weak primary indicators, Tourmaline Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FTAI Aviation and Tourmaline Bio

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

The idea behind FTAI Aviation Ltd and Tourmaline Bio 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.