Correlation Between Multi Ways and Willis Lease
Can any of the company-specific risk be diversified away by investing in both Multi Ways 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 Multi Ways and Willis Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Ways Holdings and Willis Lease Finance, you can compare the effects of market volatilities on Multi Ways 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 Multi Ways with a short position of Willis Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Ways and Willis Lease.
Diversification Opportunities for Multi Ways and Willis Lease
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Multi and Willis is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Multi Ways Holdings 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 Multi Ways 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 Multi Ways Holdings 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 Multi Ways i.e., Multi Ways and Willis Lease go up and down completely randomly.
Pair Corralation between Multi Ways and Willis Lease
Considering the 90-day investment horizon Multi Ways Holdings is expected to under-perform the Willis Lease. In addition to that, Multi Ways is 1.02 times more volatile than Willis Lease Finance. It trades about -0.18 of its total potential returns per unit of risk. Willis Lease Finance is currently generating about 0.2 per unit of volatility. If you would invest 14,863 in Willis Lease Finance on August 30, 2024 and sell it today you would earn a total of 6,351 from holding Willis Lease Finance or generate 42.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Ways Holdings vs. Willis Lease Finance
Performance |
| Timeline |
| Multi Ways Holdings |
| Willis Lease Finance |
Multi Ways and Willis Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Ways and Willis Lease
The main advantage of trading using opposite Multi Ways and Willis Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Ways 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.| Multi Ways vs. FlexShopper | Multi Ways vs. Hertz Global Holdings | Multi Ways vs. HyreCar | Multi Ways vs. Avis Budget 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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