Correlation Between WILLIS LEASE and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and SEALED AIR 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 SEALED AIR 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 SEALED AIR , you can compare the effects of market volatilities on WILLIS LEASE and SEALED AIR 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 SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and SEALED AIR.
Diversification Opportunities for WILLIS LEASE and SEALED AIR
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WILLIS and SEALED is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR 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 SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and SEALED AIR go up and down completely randomly.
Pair Corralation between WILLIS LEASE and SEALED AIR
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 2.88 times more return on investment than SEALED AIR. However, WILLIS LEASE is 2.88 times more volatile than SEALED AIR . It trades about 0.23 of its potential returns per unit of risk. SEALED AIR is currently generating about 0.09 per unit of risk. If you would invest 12,385 in WILLIS LEASE FIN on August 29, 2024 and sell it today you would earn a total of 7,015 from holding WILLIS LEASE FIN or generate 56.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. SEALED AIR
Performance |
| Timeline |
| WILLIS LEASE FIN |
| SEALED AIR |
WILLIS LEASE and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and SEALED AIR
The main advantage of trading using opposite WILLIS LEASE and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, SEALED AIR 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 SEALED AIR will offset losses from the drop in SEALED AIR's long position.| WILLIS LEASE vs. WillScot Mobile Mini | WILLIS LEASE vs. Superior Plus Corp | WILLIS LEASE vs. SIVERS SEMICONDUCTORS AB | WILLIS LEASE vs. Talanx AG |
| SEALED AIR vs. American Eagle Outfitters | SEALED AIR vs. Safety Insurance Group | SEALED AIR vs. Goosehead Insurance | SEALED AIR vs. JD SPORTS FASH |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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