Correlation Between FEMALE HEALTH and WILLIS LEASE
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and WILLIS LEASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and WILLIS LEASE FIN, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of WILLIS LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and WILLIS LEASE.
Diversification Opportunities for FEMALE HEALTH and WILLIS LEASE
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FEMALE and WILLIS is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and WILLIS LEASE go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and WILLIS LEASE
Assuming the 90 days trading horizon FEMALE HEALTH is expected to under-perform the WILLIS LEASE. In addition to that, FEMALE HEALTH is 2.04 times more volatile than WILLIS LEASE FIN. It trades about -0.04 of its total potential returns per unit of risk. WILLIS LEASE FIN is currently generating about 0.11 per unit of volatility. If you would invest 4,467 in WILLIS LEASE FIN on August 24, 2024 and sell it today you would earn a total of 13,233 from holding WILLIS LEASE FIN or generate 296.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. WILLIS LEASE FIN
Performance |
| Timeline |
| FEMALE HEALTH |
| WILLIS LEASE FIN |
FEMALE HEALTH and WILLIS LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and WILLIS LEASE
The main advantage of trading using opposite FEMALE HEALTH and WILLIS LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc |
| WILLIS LEASE vs. United Rentals | WILLIS LEASE vs. WillScot Mobile Mini | WILLIS LEASE vs. Superior Plus Corp | WILLIS LEASE vs. NMI Holdings |
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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