Correlation Between WILLIS LEASE and United States
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on WILLIS LEASE and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and United States.
Diversification Opportunities for WILLIS LEASE and United States
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WILLIS and United is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and United States go up and down completely randomly.
Pair Corralation between WILLIS LEASE and United States
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 1.93 times more return on investment than United States. However, WILLIS LEASE is 1.93 times more volatile than United States Steel. It trades about 0.15 of its potential returns per unit of risk. United States Steel is currently generating about 0.11 per unit of risk. If you would invest 16,580 in WILLIS LEASE FIN on September 2, 2024 and sell it today you would earn a total of 3,020 from holding WILLIS LEASE FIN or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. United States Steel
Performance |
| Timeline |
| WILLIS LEASE FIN |
| United States Steel |
WILLIS LEASE and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and United States
The main advantage of trading using opposite WILLIS LEASE and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| WILLIS LEASE vs. Superior Plus Corp | WILLIS LEASE vs. NMI Holdings | WILLIS LEASE vs. Origin Agritech | WILLIS LEASE vs. SIVERS SEMICONDUCTORS AB |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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