Correlation Between WILLIS LEASE and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and FUYO GENERAL 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 FUYO GENERAL 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 FUYO GENERAL LEASE, you can compare the effects of market volatilities on WILLIS LEASE and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and FUYO GENERAL.
Diversification Opportunities for WILLIS LEASE and FUYO GENERAL
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WILLIS and FUYO is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and FUYO GENERAL go up and down completely randomly.
Pair Corralation between WILLIS LEASE and FUYO GENERAL
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 1.96 times more return on investment than FUYO GENERAL. However, WILLIS LEASE is 1.96 times more volatile than FUYO GENERAL LEASE. It trades about 0.11 of its potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.03 per unit of risk. If you would invest 4,741 in WILLIS LEASE FIN on August 28, 2024 and sell it today you would earn a total of 13,859 from holding WILLIS LEASE FIN or generate 292.32% 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. FUYO GENERAL LEASE
Performance |
| Timeline |
| WILLIS LEASE FIN |
| FUYO GENERAL LEASE |
WILLIS LEASE and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and FUYO GENERAL
The main advantage of trading using opposite WILLIS LEASE and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL'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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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