Correlation Between Micro Leasing and Lease IT
Can any of the company-specific risk be diversified away by investing in both Micro Leasing and Lease IT 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 Micro Leasing and Lease IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micro Leasing Public and Lease IT Public, you can compare the effects of market volatilities on Micro Leasing and Lease IT 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 Micro Leasing with a short position of Lease IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micro Leasing and Lease IT.
Diversification Opportunities for Micro Leasing and Lease IT
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Micro and Lease is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Micro Leasing Public and Lease IT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lease IT Public and Micro Leasing 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 Micro Leasing Public are associated (or correlated) with Lease IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lease IT Public has no effect on the direction of Micro Leasing i.e., Micro Leasing and Lease IT go up and down completely randomly.
Pair Corralation between Micro Leasing and Lease IT
Assuming the 90 days trading horizon Micro Leasing Public is expected to generate 1.36 times more return on investment than Lease IT. However, Micro Leasing is 1.36 times more volatile than Lease IT Public. It trades about -0.39 of its potential returns per unit of risk. Lease IT Public is currently generating about -0.56 per unit of risk. If you would invest 132.00 in Micro Leasing Public on September 15, 2024 and sell it today you would lose (28.00) from holding Micro Leasing Public or give up 21.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micro Leasing Public vs. Lease IT Public
Performance |
| Timeline |
| Micro Leasing Public |
| Lease IT Public |
Micro Leasing and Lease IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micro Leasing and Lease IT
The main advantage of trading using opposite Micro Leasing and Lease IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micro Leasing position performs unexpectedly, Lease IT 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 Lease IT will offset losses from the drop in Lease IT's long position.| Micro Leasing vs. Amanah Leasing Public | Micro Leasing vs. Muangthai Capital Public | Micro Leasing vs. Infraset Public | Micro Leasing vs. JMT Network Services |
| Lease IT vs. Multibax Public | Lease IT vs. Forth Smart Service | Lease IT vs. LPN Development Public | Lease IT vs. Netbay Public |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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