Correlation Between Willis Lease and Rocky Brands
Can any of the company-specific risk be diversified away by investing in both Willis Lease and Rocky Brands 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 Rocky Brands 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 Rocky Brands, you can compare the effects of market volatilities on Willis Lease and Rocky Brands 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 Rocky Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willis Lease and Rocky Brands.
Diversification Opportunities for Willis Lease and Rocky Brands
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Willis and Rocky is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Willis Lease Finance and Rocky Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Brands 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 Rocky Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Brands has no effect on the direction of Willis Lease i.e., Willis Lease and Rocky Brands go up and down completely randomly.
Pair Corralation between Willis Lease and Rocky Brands
Given the investment horizon of 90 days Willis Lease Finance is expected to generate 0.97 times more return on investment than Rocky Brands. However, Willis Lease Finance is 1.03 times less risky than Rocky Brands. It trades about 0.13 of its potential returns per unit of risk. Rocky Brands is currently generating about -0.14 per unit of risk. If you would invest 18,154 in Willis Lease Finance on August 27, 2024 and sell it today you would earn a total of 2,572 from holding Willis Lease Finance or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willis Lease Finance vs. Rocky Brands
Performance |
| Timeline |
| Willis Lease Finance |
| Rocky Brands |
Willis Lease and Rocky Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willis Lease and Rocky Brands
The main advantage of trading using opposite Willis Lease and Rocky Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willis Lease position performs unexpectedly, Rocky Brands 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 Rocky Brands will offset losses from the drop in Rocky Brands' long position.| Willis Lease vs. PROG Holdings | Willis Lease vs. McGrath RentCorp | Willis Lease vs. Mega Matrix Corp | Willis Lease vs. FTAI Aviation Ltd |
| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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