Correlation Between FTAI Infrastructure and Mammoth Energy

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

By analyzing existing cross correlation between FTAI Infrastructure and Mammoth Energy Services, you can compare the effects of market volatilities on FTAI Infrastructure and Mammoth Energy 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 Mammoth Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Infrastructure and Mammoth Energy.

Diversification Opportunities for FTAI Infrastructure and Mammoth Energy

0.51

Correlation Coefficient

FTAI Infrastructure  Mammoth Energy

Very weak diversification

The 3 months correlation between FTAI and Mammoth is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Infrastructure and Mammoth Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Energy Services 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 Mammoth Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Energy Services has no effect on the direction of FTAI Infrastructure i.e., FTAI Infrastructure and Mammoth Energy go up and down completely randomly.

Pair Corralation between FTAI Infrastructure and Mammoth Energy

Considering the 90-day investment horizon FTAI Infrastructure is expected to under-perform the Mammoth Energy. But the stock apears to be less risky and, when comparing its historical volatility, FTAI Infrastructure is 1.12 times less risky than Mammoth Energy. The stock trades about -0.06 of its potential returns per unit of risk. The Mammoth Energy Services is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  382.00  in Mammoth Energy Services on August 30, 2024 and sell it today you would lose (24.00) from holding Mammoth Energy Services or give up 6.28% of portfolio value over 90 days.

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

FTAI Infrastructure  vs.  Mammoth Energy Services

FTAI Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FTAI Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's forward indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Mammoth Energy Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mammoth Energy Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Mammoth Energy is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with FTAI Infrastructure and Mammoth Energy

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

The idea behind FTAI Infrastructure and Mammoth Energy Services 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.