Correlation Between FlexShopper and Willis Lease
Can any of the company-specific risk be diversified away by investing in both FlexShopper 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 FlexShopper and Willis Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShopper and Willis Lease Finance, you can compare the effects of market volatilities on FlexShopper 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 FlexShopper with a short position of Willis Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShopper and Willis Lease.
Diversification Opportunities for FlexShopper and Willis Lease
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FlexShopper and Willis is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding FlexShopper and Willis Lease Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willis Lease Finance and FlexShopper 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 FlexShopper 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 Finance has no effect on the direction of FlexShopper i.e., FlexShopper and Willis Lease go up and down completely randomly.
Pair Corralation between FlexShopper and Willis Lease
Given the investment horizon of 90 days FlexShopper is expected to generate 1.03 times more return on investment than Willis Lease. However, FlexShopper is 1.03 times more volatile than Willis Lease Finance. It trades about 0.18 of its potential returns per unit of risk. Willis Lease Finance is currently generating about 0.07 per unit of risk. If you would invest 134.00 in FlexShopper on August 23, 2024 and sell it today you would earn a total of 32.00 from holding FlexShopper or generate 23.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FlexShopper vs. Willis Lease Finance
Performance |
| Timeline |
| FlexShopper |
| Willis Lease Finance |
FlexShopper and Willis Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShopper and Willis Lease
The main advantage of trading using opposite FlexShopper and Willis Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShopper 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.| FlexShopper vs. AZN Capital Corp | FlexShopper vs. Fortress Transportation and | FlexShopper vs. Ashtead Gro | FlexShopper vs. Alta Equipment Group |
| Willis Lease vs. Custom Truck One | Willis Lease vs. GATX Corporation | Willis Lease vs. HE Equipment Services | Willis Lease vs. Alta Equipment Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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