Correlation Between WILLIS LEASE and Gemfields Group
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and Gemfields Group 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 Gemfields Group 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 Gemfields Group Limited, you can compare the effects of market volatilities on WILLIS LEASE and Gemfields Group 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 Gemfields Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and Gemfields Group.
Diversification Opportunities for WILLIS LEASE and Gemfields Group
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WILLIS and Gemfields is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and Gemfields Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemfields Group 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 Gemfields Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemfields Group has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and Gemfields Group go up and down completely randomly.
Pair Corralation between WILLIS LEASE and Gemfields Group
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 0.36 times more return on investment than Gemfields Group. However, WILLIS LEASE FIN is 2.81 times less risky than Gemfields Group. It trades about 0.12 of its potential returns per unit of risk. Gemfields Group Limited is currently generating about -0.01 per unit of risk. If you would invest 19,400 in WILLIS LEASE FIN on October 16, 2024 and sell it today you would earn a total of 1,000.00 from holding WILLIS LEASE FIN or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. Gemfields Group Limited
Performance |
| Timeline |
| WILLIS LEASE FIN |
| Gemfields Group |
WILLIS LEASE and Gemfields Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and Gemfields Group
The main advantage of trading using opposite WILLIS LEASE and Gemfields Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, Gemfields Group 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 Gemfields Group will offset losses from the drop in Gemfields Group's long position.| WILLIS LEASE vs. OURGAME INTHOLDL 00005 | WILLIS LEASE vs. Scientific Games | WILLIS LEASE vs. GigaMedia | WILLIS LEASE vs. Penn National Gaming |
| Gemfields Group vs. VIENNA INSURANCE GR | Gemfields Group vs. UNIQA INSURANCE GR | Gemfields Group vs. ZURICH INSURANCE GROUP | Gemfields Group vs. WILLIS LEASE FIN |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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