Correlation Between Willis Lease and Eshallgo
Can any of the company-specific risk be diversified away by investing in both Willis Lease and Eshallgo 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 Eshallgo 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 Eshallgo Class A, you can compare the effects of market volatilities on Willis Lease and Eshallgo 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 Eshallgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willis Lease and Eshallgo.
Diversification Opportunities for Willis Lease and Eshallgo
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Willis and Eshallgo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Willis Lease Finance and Eshallgo Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eshallgo Class A 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 Eshallgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eshallgo Class A has no effect on the direction of Willis Lease i.e., Willis Lease and Eshallgo go up and down completely randomly.
Pair Corralation between Willis Lease and Eshallgo
Given the investment horizon of 90 days Willis Lease is expected to generate 1.8 times less return on investment than Eshallgo. But when comparing it to its historical volatility, Willis Lease Finance is 1.63 times less risky than Eshallgo. It trades about 0.21 of its potential returns per unit of risk. Eshallgo Class A is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 193.00 in Eshallgo Class A on August 26, 2024 and sell it today you would earn a total of 182.00 from holding Eshallgo Class A or generate 94.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willis Lease Finance vs. Eshallgo Class A
Performance |
| Timeline |
| Willis Lease Finance |
| Eshallgo Class A |
Willis Lease and Eshallgo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willis Lease and Eshallgo
The main advantage of trading using opposite Willis Lease and Eshallgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willis Lease position performs unexpectedly, Eshallgo 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 Eshallgo will offset losses from the drop in Eshallgo'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 |
| Eshallgo vs. Cumberland Pharmaceuticals | Eshallgo vs. Merit Medical Systems | Eshallgo vs. LENSAR Inc | Eshallgo vs. Cardinal Health |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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