Correlation Between WILLIS LEASE and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and VIVA WINE 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 VIVA WINE 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 VIVA WINE GROUP, you can compare the effects of market volatilities on WILLIS LEASE and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and VIVA WINE.
Diversification Opportunities for WILLIS LEASE and VIVA WINE
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WILLIS and VIVA is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and VIVA WINE go up and down completely randomly.
Pair Corralation between WILLIS LEASE and VIVA WINE
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 2.01 times more return on investment than VIVA WINE. However, WILLIS LEASE is 2.01 times more volatile than VIVA WINE GROUP. It trades about 0.06 of its potential returns per unit of risk. VIVA WINE GROUP is currently generating about -0.16 per unit of risk. If you would invest 18,500 in WILLIS LEASE FIN on October 19, 2024 and sell it today you would earn a total of 400.00 from holding WILLIS LEASE FIN or generate 2.16% 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. VIVA WINE GROUP
Performance |
| Timeline |
| WILLIS LEASE FIN |
| VIVA WINE GROUP |
WILLIS LEASE and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and VIVA WINE
The main advantage of trading using opposite WILLIS LEASE and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| WILLIS LEASE vs. FIRST SHIP LEASE | WILLIS LEASE vs. Salesforce | WILLIS LEASE vs. CANON MARKETING JP | WILLIS LEASE vs. National Retail Properties |
| VIVA WINE vs. PENN Entertainment | VIVA WINE vs. WILLIS LEASE FIN | VIVA WINE vs. Townsquare Media | VIVA WINE vs. Nexstar Media Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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