Correlation Between Peijia Medical and WILLIS LEASE
Can any of the company-specific risk be diversified away by investing in both Peijia Medical and WILLIS LEASE 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 Peijia Medical and WILLIS LEASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peijia Medical Limited and WILLIS LEASE FIN, you can compare the effects of market volatilities on Peijia Medical and WILLIS LEASE 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 Peijia Medical with a short position of WILLIS LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peijia Medical and WILLIS LEASE.
Diversification Opportunities for Peijia Medical and WILLIS LEASE
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peijia and WILLIS is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Peijia Medical Limited and WILLIS LEASE FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WILLIS LEASE FIN and Peijia Medical 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 Peijia Medical Limited are associated (or correlated) with WILLIS LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WILLIS LEASE FIN has no effect on the direction of Peijia Medical i.e., Peijia Medical and WILLIS LEASE go up and down completely randomly.
Pair Corralation between Peijia Medical and WILLIS LEASE
Assuming the 90 days horizon Peijia Medical Limited is expected to generate 1.12 times more return on investment than WILLIS LEASE. However, Peijia Medical is 1.12 times more volatile than WILLIS LEASE FIN. It trades about 0.02 of its potential returns per unit of risk. WILLIS LEASE FIN is currently generating about -0.03 per unit of risk. If you would invest 44.00 in Peijia Medical Limited on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Peijia Medical Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peijia Medical Limited vs. WILLIS LEASE FIN
Performance |
| Timeline |
| Peijia Medical |
| WILLIS LEASE FIN |
Peijia Medical and WILLIS LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peijia Medical and WILLIS LEASE
The main advantage of trading using opposite Peijia Medical and WILLIS LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peijia Medical position performs unexpectedly, WILLIS LEASE 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 WILLIS LEASE will offset losses from the drop in WILLIS LEASE's long position.| Peijia Medical vs. Lendlease Group | Peijia Medical vs. United Rentals | Peijia Medical vs. WILLIS LEASE FIN | Peijia Medical vs. Vishay Intertechnology |
| WILLIS LEASE vs. LPKF Laser Electronics | WILLIS LEASE vs. De Grey Mining | WILLIS LEASE vs. Richardson Electronics | WILLIS LEASE vs. KIMBALL ELECTRONICS |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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