Correlation Between WILLIS LEASE and COSMOSTEEL HLDGS
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS, you can compare the effects of market volatilities on WILLIS LEASE and COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and COSMOSTEEL HLDGS.
Diversification Opportunities for WILLIS LEASE and COSMOSTEEL HLDGS
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WILLIS and COSMOSTEEL is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMOSTEEL HLDGS has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and COSMOSTEEL HLDGS go up and down completely randomly.
Pair Corralation between WILLIS LEASE and COSMOSTEEL HLDGS
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 2.91 times more return on investment than COSMOSTEEL HLDGS. However, WILLIS LEASE is 2.91 times more volatile than COSMOSTEEL HLDGS. It trades about 0.1 of its potential returns per unit of risk. COSMOSTEEL HLDGS is currently generating about 0.03 per unit of risk. If you would invest 16,980 in WILLIS LEASE FIN on August 27, 2024 and sell it today you would earn a total of 1,620 from holding WILLIS LEASE FIN or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. COSMOSTEEL HLDGS
Performance |
| Timeline |
| WILLIS LEASE FIN |
| COSMOSTEEL HLDGS |
WILLIS LEASE and COSMOSTEEL HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and COSMOSTEEL HLDGS
The main advantage of trading using opposite WILLIS LEASE and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS will offset losses from the drop in COSMOSTEEL HLDGS's long position.| WILLIS LEASE vs. HANOVER INSURANCE | WILLIS LEASE vs. Ping An Insurance | WILLIS LEASE vs. THAI BEVERAGE | WILLIS LEASE vs. Tower One Wireless |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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