Correlation Between WILLIS LEASE and NORDHEALTH
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and NORDHEALTH 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 NORDHEALTH 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 NORDHEALTH AS NK, you can compare the effects of market volatilities on WILLIS LEASE and NORDHEALTH 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 NORDHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and NORDHEALTH.
Diversification Opportunities for WILLIS LEASE and NORDHEALTH
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WILLIS and NORDHEALTH is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and NORDHEALTH AS NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDHEALTH AS NK 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 NORDHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDHEALTH AS NK has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and NORDHEALTH go up and down completely randomly.
Pair Corralation between WILLIS LEASE and NORDHEALTH
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 0.56 times more return on investment than NORDHEALTH. However, WILLIS LEASE FIN is 1.8 times less risky than NORDHEALTH. It trades about 0.11 of its potential returns per unit of risk. NORDHEALTH AS NK is currently generating about 0.04 per unit of risk. If you would invest 4,467 in WILLIS LEASE FIN on August 24, 2024 and sell it today you would earn a total of 13,233 from holding WILLIS LEASE FIN or generate 296.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. NORDHEALTH AS NK
Performance |
| Timeline |
| WILLIS LEASE FIN |
| NORDHEALTH AS NK |
WILLIS LEASE and NORDHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and NORDHEALTH
The main advantage of trading using opposite WILLIS LEASE and NORDHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, NORDHEALTH 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 NORDHEALTH will offset losses from the drop in NORDHEALTH's long position.| WILLIS LEASE vs. United Rentals | WILLIS LEASE vs. WillScot Mobile Mini | WILLIS LEASE vs. Superior Plus Corp | WILLIS LEASE vs. NMI Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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