Correlation Between SHIP HEALTHCARE and WILLIS LEASE
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and WILLIS LEASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and WILLIS LEASE FIN, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of WILLIS LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and WILLIS LEASE.
Diversification Opportunities for SHIP HEALTHCARE and WILLIS LEASE
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between SHIP and WILLIS is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and WILLIS LEASE go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and WILLIS LEASE
Assuming the 90 days horizon SHIP HEALTHCARE is expected to generate 44.31 times less return on investment than WILLIS LEASE. But when comparing it to its historical volatility, SHIP HEALTHCARE HLDGINC is 3.19 times less risky than WILLIS LEASE. It trades about 0.01 of its potential returns per unit of risk. WILLIS LEASE FIN is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 17,180 in WILLIS LEASE FIN on September 3, 2024 and sell it today you would earn a total of 2,420 from holding WILLIS LEASE FIN or generate 14.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. WILLIS LEASE FIN
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| WILLIS LEASE FIN |
SHIP HEALTHCARE and WILLIS LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and WILLIS LEASE
The main advantage of trading using opposite SHIP HEALTHCARE and WILLIS LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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.| SHIP HEALTHCARE vs. DEVRY EDUCATION GRP | SHIP HEALTHCARE vs. Titan Machinery | SHIP HEALTHCARE vs. CHINA EDUCATION GROUP | SHIP HEALTHCARE vs. United Utilities Group |
| WILLIS LEASE vs. Altair Engineering | WILLIS LEASE vs. WIZZ AIR HLDGUNSPADR4 | WILLIS LEASE vs. AIR PRODCHEMICALS | WILLIS LEASE vs. JAPAN TOBACCO UNSPADR12 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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