Correlation Between Fortress Transp and Willis Lease
Can any of the company-specific risk be diversified away by investing in both Fortress Transp 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 Fortress Transp and Willis Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transp Infra and Willis Lease Finance, you can compare the effects of market volatilities on Fortress Transp 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 Fortress Transp with a short position of Willis Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and Willis Lease.
Diversification Opportunities for Fortress Transp and Willis Lease
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fortress and Willis is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra 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 Fortress Transp 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 Fortress Transp Infra 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 Fortress Transp i.e., Fortress Transp and Willis Lease go up and down completely randomly.
Pair Corralation between Fortress Transp and Willis Lease
Given the investment horizon of 90 days Fortress Transp Infra is expected to generate 0.56 times more return on investment than Willis Lease. However, Fortress Transp Infra is 1.78 times less risky than Willis Lease. It trades about 0.31 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 13,996 in Fortress Transp Infra on August 23, 2024 and sell it today you would earn a total of 3,500 from holding Fortress Transp Infra or generate 25.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Transp Infra vs. Willis Lease Finance
Performance |
| Timeline |
| Fortress Transp Infra |
| Willis Lease Finance |
Fortress Transp and Willis Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Transp and Willis Lease
The main advantage of trading using opposite Fortress Transp and Willis Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp 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.| Fortress Transp vs. HE Equipment Services | Fortress Transp vs. Air Lease | Fortress Transp vs. Aquagold International | Fortress Transp vs. Small Cap Core |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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