Correlation Between Willis Lease and Fortress Transp
Can any of the company-specific risk be diversified away by investing in both Willis Lease and Fortress Transp 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 Fortress Transp 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 Fortress Transp Infra, you can compare the effects of market volatilities on Willis Lease and Fortress Transp 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 Fortress Transp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willis Lease and Fortress Transp.
Diversification Opportunities for Willis Lease and Fortress Transp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Willis and Fortress is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Willis Lease Finance and Fortress Transp Infra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transp Infra 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 Fortress Transp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transp Infra has no effect on the direction of Willis Lease i.e., Willis Lease and Fortress Transp go up and down completely randomly.
Pair Corralation between Willis Lease and Fortress Transp
Given the investment horizon of 90 days Willis Lease Finance is expected to generate 1.24 times more return on investment than Fortress Transp. However, Willis Lease is 1.24 times more volatile than Fortress Transp Infra. It trades about 0.26 of its potential returns per unit of risk. Fortress Transp Infra is currently generating about 0.14 per unit of risk. If you would invest 4,765 in Willis Lease Finance on September 18, 2024 and sell it today you would earn a total of 16,542 from holding Willis Lease Finance or generate 347.15% 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. Fortress Transp Infra
Performance |
| Timeline |
| Willis Lease Finance |
| Fortress Transp Infra |
Willis Lease and Fortress Transp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willis Lease and Fortress Transp
The main advantage of trading using opposite Willis Lease and Fortress Transp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willis Lease position performs unexpectedly, Fortress Transp 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 Fortress Transp will offset losses from the drop in Fortress Transp's long position.| Willis Lease vs. McGrath RentCorp | Willis Lease vs. Custom Truck One | Willis Lease vs. Alta Equipment Group | Willis Lease vs. PROG Holdings |
| Fortress Transp vs. McGrath RentCorp | Fortress Transp vs. Custom Truck One | Fortress Transp vs. Alta Equipment Group | Fortress Transp vs. PROG Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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