Correlation Between WILLIS LEASE and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and USWE SPORTS 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 USWE SPORTS 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 USWE SPORTS AB, you can compare the effects of market volatilities on WILLIS LEASE and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and USWE SPORTS.
Diversification Opportunities for WILLIS LEASE and USWE SPORTS
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WILLIS and USWE is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and USWE SPORTS go up and down completely randomly.
Pair Corralation between WILLIS LEASE and USWE SPORTS
Assuming the 90 days horizon WILLIS LEASE FIN is expected to under-perform the USWE SPORTS. But the stock apears to be less risky and, when comparing its historical volatility, WILLIS LEASE FIN is 1.33 times less risky than USWE SPORTS. The stock trades about -0.27 of its potential returns per unit of risk. The USWE SPORTS AB is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 75.00 in USWE SPORTS AB on November 3, 2024 and sell it today you would earn a total of 11.00 from holding USWE SPORTS AB or generate 14.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. USWE SPORTS AB
Performance |
| Timeline |
| WILLIS LEASE FIN |
| USWE SPORTS AB |
WILLIS LEASE and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and USWE SPORTS
The main advantage of trading using opposite WILLIS LEASE and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| WILLIS LEASE vs. GRIFFIN MINING LTD | WILLIS LEASE vs. Globex Mining Enterprises | WILLIS LEASE vs. MCEWEN MINING INC | WILLIS LEASE vs. Aya Gold Silver |
| USWE SPORTS vs. OPKO HEALTH | USWE SPORTS vs. Planet Fitness | USWE SPORTS vs. OPERA SOFTWARE | USWE SPORTS vs. Phibro Animal Health |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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