Correlation Between WILLIS LEASE and JJ SNACK
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and JJ SNACK 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 JJ SNACK 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 JJ SNACK FOODS, you can compare the effects of market volatilities on WILLIS LEASE and JJ SNACK 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 JJ SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and JJ SNACK.
Diversification Opportunities for WILLIS LEASE and JJ SNACK
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WILLIS and JJ1 is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and JJ SNACK FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJ SNACK FOODS 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 JJ SNACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJ SNACK FOODS has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and JJ SNACK go up and down completely randomly.
Pair Corralation between WILLIS LEASE and JJ SNACK
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 4.63 times more return on investment than JJ SNACK. However, WILLIS LEASE is 4.63 times more volatile than JJ SNACK FOODS. It trades about 0.13 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.2 per unit of risk. If you would invest 16,680 in WILLIS LEASE FIN on August 30, 2024 and sell it today you would earn a total of 2,620 from holding WILLIS LEASE FIN or generate 15.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. JJ SNACK FOODS
Performance |
| Timeline |
| WILLIS LEASE FIN |
| JJ SNACK FOODS |
WILLIS LEASE and JJ SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and JJ SNACK
The main advantage of trading using opposite WILLIS LEASE and JJ SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, JJ SNACK 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 JJ SNACK will offset losses from the drop in JJ SNACK's long position.| WILLIS LEASE vs. Superior Plus Corp | WILLIS LEASE vs. SIVERS SEMICONDUCTORS AB | WILLIS LEASE vs. Talanx AG | WILLIS LEASE vs. 2G ENERGY |
| JJ SNACK vs. SCANDMEDICAL SOLDK 040 | JJ SNACK vs. Clearside Biomedical | JJ SNACK vs. Caltagirone SpA | JJ SNACK vs. Tianjin Capital Environmental |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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