Correlation Between WILLIS LEASE and Identiv
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and Identiv 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 Identiv 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 Identiv, you can compare the effects of market volatilities on WILLIS LEASE and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and Identiv.
Diversification Opportunities for WILLIS LEASE and Identiv
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WILLIS and Identiv is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and Identiv go up and down completely randomly.
Pair Corralation between WILLIS LEASE and Identiv
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 0.87 times more return on investment than Identiv. However, WILLIS LEASE FIN is 1.15 times less risky than Identiv. It trades about 0.18 of its potential returns per unit of risk. Identiv is currently generating about -0.05 per unit of risk. If you would invest 4,330 in WILLIS LEASE FIN on November 3, 2024 and sell it today you would earn a total of 13,670 from holding WILLIS LEASE FIN or generate 315.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. Identiv
Performance |
| Timeline |
| WILLIS LEASE FIN |
| Identiv |
WILLIS LEASE and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and Identiv
The main advantage of trading using opposite WILLIS LEASE and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| WILLIS LEASE vs. Hochschild Mining plc | WILLIS LEASE vs. Media and Games | WILLIS LEASE vs. DETALION GAMES SA | WILLIS LEASE vs. OURGAME INTHOLDL 00005 |
| Identiv vs. ecotel communication ag | Identiv vs. Adtalem Global Education | Identiv vs. CHINA EDUCATION GROUP | Identiv vs. Charter Communications |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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