Correlation Between Willis Lease and Custom Truck
Can any of the company-specific risk be diversified away by investing in both Willis Lease and Custom Truck 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 Custom Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willis Lease Finance and Custom Truck One, you can compare the effects of market volatilities on Willis Lease and Custom Truck 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 Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willis Lease and Custom Truck.
Diversification Opportunities for Willis Lease and Custom Truck
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Willis and Custom is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Willis Lease Finance and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One 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 Finance are associated (or correlated) with Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of Willis Lease i.e., Willis Lease and Custom Truck go up and down completely randomly.
Pair Corralation between Willis Lease and Custom Truck
Given the investment horizon of 90 days Willis Lease is expected to generate 2.7 times less return on investment than Custom Truck. In addition to that, Willis Lease is 1.44 times more volatile than Custom Truck One. It trades about 0.14 of its total potential returns per unit of risk. Custom Truck One is currently generating about 0.56 per unit of volatility. If you would invest 356.00 in Custom Truck One on August 27, 2024 and sell it today you would earn a total of 216.00 from holding Custom Truck One or generate 60.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willis Lease Finance vs. Custom Truck One
Performance |
| Timeline |
| Willis Lease Finance |
| Custom Truck One |
Willis Lease and Custom Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willis Lease and Custom Truck
The main advantage of trading using opposite Willis Lease and Custom Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willis Lease position performs unexpectedly, Custom Truck 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 Custom Truck will offset losses from the drop in Custom Truck's long position.| Willis Lease vs. PROG Holdings | Willis Lease vs. McGrath RentCorp | Willis Lease vs. Mega Matrix Corp | Willis Lease vs. FTAI Aviation Ltd |
| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. Mega Matrix Corp | Custom Truck vs. FTAI Aviation Ltd |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |