Correlation Between Canadian Utilities and WILLIS LEASE
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities 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 Canadian Utilities and WILLIS LEASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and WILLIS LEASE FIN, you can compare the effects of market volatilities on Canadian Utilities 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 Canadian Utilities with a short position of WILLIS LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and WILLIS LEASE.
Diversification Opportunities for Canadian Utilities and WILLIS LEASE
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and WILLIS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities 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 Canadian Utilities 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 Canadian Utilities 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 Canadian Utilities i.e., Canadian Utilities and WILLIS LEASE go up and down completely randomly.
Pair Corralation between Canadian Utilities and WILLIS LEASE
Assuming the 90 days horizon Canadian Utilities is expected to generate 7.06 times less return on investment than WILLIS LEASE. But when comparing it to its historical volatility, Canadian Utilities Limited is 3.22 times less risky than WILLIS LEASE. It trades about 0.09 of its potential returns per unit of risk. WILLIS LEASE FIN is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,487 in WILLIS LEASE FIN on August 28, 2024 and sell it today you would earn a total of 14,113 from holding WILLIS LEASE FIN or generate 314.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. WILLIS LEASE FIN
Performance |
| Timeline |
| Canadian Utilities |
| WILLIS LEASE FIN |
Canadian Utilities and WILLIS LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and WILLIS LEASE
The main advantage of trading using opposite Canadian Utilities and WILLIS LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities 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.| Canadian Utilities vs. CONAGRA FOODS | Canadian Utilities vs. PT Indofood Sukses | Canadian Utilities vs. Performance Food Group | Canadian Utilities vs. THRACE PLASTICS |
| WILLIS LEASE vs. Superior Plus Corp | WILLIS LEASE vs. NMI Holdings | WILLIS LEASE vs. Origin Agritech | WILLIS LEASE vs. SIVERS SEMICONDUCTORS AB |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |