Correlation Between Eshallgo and Willis Lease

Can any of the company-specific risk be diversified away by investing in both Eshallgo and Willis Lease 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 Eshallgo and Willis Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eshallgo Class A and Willis Lease Finance, you can compare the effects of market volatilities on Eshallgo and Willis Lease 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 Eshallgo with a short position of Willis Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eshallgo and Willis Lease.

Diversification Opportunities for Eshallgo and Willis Lease

0.72

Correlation Coefficient

Eshallgo  Willis Lease

Poor diversification

The 3 months correlation between Eshallgo and Willis is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Eshallgo Class A and Willis Lease Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willis Lease Finance and Eshallgo 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 Eshallgo Class A are associated (or correlated) with Willis Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willis Lease Finance has no effect on the direction of Eshallgo i.e., Eshallgo and Willis Lease go up and down completely randomly.

Pair Corralation between Eshallgo and Willis Lease

Given the investment horizon of 90 days Eshallgo Class A is expected to under-perform the Willis Lease. In addition to that, Eshallgo is 2.92 times more volatile than Willis Lease Finance. It trades about -0.04 of its total potential returns per unit of risk. Willis Lease Finance is currently generating about 0.11 per unit of volatility. If you would invest  20,467  in Willis Lease Finance on October 7, 2024 and sell it today you would earn a total of  1,283  from holding Willis Lease Finance or generate 6.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Eshallgo Class A  vs.  Willis Lease Finance

Eshallgo Class A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eshallgo Class A are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Eshallgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Willis Lease Finance

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Willis Lease Finance are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Willis Lease exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eshallgo and Willis Lease

The main advantage of trading using opposite Eshallgo and Willis Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eshallgo position performs unexpectedly, Willis Lease 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 Willis Lease will offset losses from the drop in Willis Lease's long position.

The idea behind Eshallgo Class A and Willis Lease Finance 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.