Correlation Between WILLIS LEASE and NOVAGOLD RESOURCES
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES, you can compare the effects of market volatilities on WILLIS LEASE and NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and NOVAGOLD RESOURCES.
Diversification Opportunities for WILLIS LEASE and NOVAGOLD RESOURCES
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WILLIS and NOVAGOLD is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and NOVAGOLD RESOURCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVAGOLD RESOURCES has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and NOVAGOLD RESOURCES go up and down completely randomly.
Pair Corralation between WILLIS LEASE and NOVAGOLD RESOURCES
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 1.66 times more return on investment than NOVAGOLD RESOURCES. However, WILLIS LEASE is 1.66 times more volatile than NOVAGOLD RESOURCES. It trades about 0.04 of its potential returns per unit of risk. NOVAGOLD RESOURCES is currently generating about -0.04 per unit of risk. If you would invest 18,678 in WILLIS LEASE FIN on September 19, 2024 and sell it today you would earn a total of 722.00 from holding WILLIS LEASE FIN or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. NOVAGOLD RESOURCES
Performance |
| Timeline |
| WILLIS LEASE FIN |
| NOVAGOLD RESOURCES |
WILLIS LEASE and NOVAGOLD RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and NOVAGOLD RESOURCES
The main advantage of trading using opposite WILLIS LEASE and NOVAGOLD RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES will offset losses from the drop in NOVAGOLD RESOURCES's long position.| WILLIS LEASE vs. United Rentals | WILLIS LEASE vs. Superior Plus Corp | WILLIS LEASE vs. SIVERS SEMICONDUCTORS AB | WILLIS LEASE vs. Norsk Hydro ASA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |