Correlation Between Global Net and Willis Lease
Can any of the company-specific risk be diversified away by investing in both Global Net 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 Global Net and Willis Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and Willis Lease Finance, you can compare the effects of market volatilities on Global Net 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 Global Net with a short position of Willis Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Willis Lease.
Diversification Opportunities for Global Net and Willis Lease
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and Willis is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease 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 Global Net 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 Global Net Lease 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 Global Net i.e., Global Net and Willis Lease go up and down completely randomly.
Pair Corralation between Global Net and Willis Lease
Assuming the 90 days trading horizon Global Net is expected to generate 8.29 times less return on investment than Willis Lease. But when comparing it to its historical volatility, Global Net Lease is 3.49 times less risky than Willis Lease. It trades about 0.1 of its potential returns per unit of risk. Willis Lease Finance is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6,030 in Willis Lease Finance on October 13, 2024 and sell it today you would earn a total of 14,655 from holding Willis Lease Finance or generate 243.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease vs. Willis Lease Finance
Performance |
| Timeline |
| Global Net Lease |
| Willis Lease Finance |
Global Net and Willis Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Willis Lease
The main advantage of trading using opposite Global Net and Willis Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net 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.| Global Net vs. Bt Brands | Global Net vs. Constellation Brands Class | Global Net vs. Philip Morris International | Global Net vs. Vita Coco |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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