Correlation Between WILLIS LEASE and Global Ship
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and Global Ship 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 WILLIS LEASE and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WILLIS LEASE FIN and Global Ship Lease, you can compare the effects of market volatilities on WILLIS LEASE and Global Ship 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 WILLIS LEASE with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and Global Ship.
Diversification Opportunities for WILLIS LEASE and Global Ship
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between WILLIS and Global is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and WILLIS LEASE 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 WILLIS LEASE FIN are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and Global Ship go up and down completely randomly.
Pair Corralation between WILLIS LEASE and Global Ship
Assuming the 90 days horizon WILLIS LEASE FIN is expected to under-perform the Global Ship. In addition to that, WILLIS LEASE is 1.24 times more volatile than Global Ship Lease. It trades about -0.29 of its total potential returns per unit of risk. Global Ship Lease is currently generating about -0.08 per unit of volatility. If you would invest 2,182 in Global Ship Lease on November 5, 2024 and sell it today you would lose (62.00) from holding Global Ship Lease or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. Global Ship Lease
Performance |
| Timeline |
| WILLIS LEASE FIN |
| Global Ship Lease |
WILLIS LEASE and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and Global Ship
The main advantage of trading using opposite WILLIS LEASE and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| WILLIS LEASE vs. UNITED UTILITIES GR | WILLIS LEASE vs. REINET INVESTMENTS SCA | WILLIS LEASE vs. Haverty Furniture Companies | WILLIS LEASE vs. CHRYSALIS INVESTMENTS LTD |
| Global Ship vs. Universal Entertainment | Global Ship vs. ATRESMEDIA | Global Ship vs. MCEWEN MINING INC | Global Ship vs. Jacquet Metal Service |
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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