Correlation Between WILLIS LEASE and Sporttotal
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and Sporttotal 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 Sporttotal 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 Sporttotal AG, you can compare the effects of market volatilities on WILLIS LEASE and Sporttotal 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 Sporttotal. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and Sporttotal.
Diversification Opportunities for WILLIS LEASE and Sporttotal
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WILLIS and Sporttotal is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and Sporttotal AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporttotal AG 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 Sporttotal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporttotal AG has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and Sporttotal go up and down completely randomly.
Pair Corralation between WILLIS LEASE and Sporttotal
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 0.67 times more return on investment than Sporttotal. However, WILLIS LEASE FIN is 1.49 times less risky than Sporttotal. It trades about 0.1 of its potential returns per unit of risk. Sporttotal AG is currently generating about 0.0 per unit of risk. If you would invest 5,339 in WILLIS LEASE FIN on September 4, 2024 and sell it today you would earn a total of 14,261 from holding WILLIS LEASE FIN or generate 267.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. Sporttotal AG
Performance |
| Timeline |
| WILLIS LEASE FIN |
| Sporttotal AG |
WILLIS LEASE and Sporttotal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and Sporttotal
The main advantage of trading using opposite WILLIS LEASE and Sporttotal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, Sporttotal 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 Sporttotal will offset losses from the drop in Sporttotal's long position.The idea behind WILLIS LEASE FIN and Sporttotal AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sporttotal vs. SCANSOURCE | Sporttotal vs. GigaMedia | Sporttotal vs. REMEDY ENTERTAINMENT OYJ | Sporttotal vs. Harmony Gold Mining |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |