Correlation Between Graphjet Technology and Willis Lease

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

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

Diversification Opportunities for Graphjet Technology and Willis Lease

-0.02

Correlation Coefficient

Graphjet Technology  Willis Lease

Good diversification

The 3 months correlation between Graphjet and Willis is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Graphjet Technology 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 Graphjet Technology 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 Graphjet Technology 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 Graphjet Technology i.e., Graphjet Technology and Willis Lease go up and down completely randomly.

Pair Corralation between Graphjet Technology and Willis Lease

Considering the 90-day investment horizon Graphjet Technology is expected to generate 16.14 times more return on investment than Willis Lease. However, Graphjet Technology is 16.14 times more volatile than Willis Lease Finance. It trades about 0.05 of its potential returns per unit of risk. Willis Lease Finance is currently generating about 0.07 per unit of risk. If you would invest  271.00  in Graphjet Technology on October 9, 2024 and sell it today you would lose (203.00) from holding Graphjet Technology or give up 74.91% of portfolio value over 90 days.

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

Graphjet Technology  vs.  Willis Lease Finance

Graphjet Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Graphjet Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Graphjet Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Willis Lease Finance

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Willis Lease Finance are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak 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 Graphjet Technology and Willis Lease

The main advantage of trading using opposite Graphjet Technology and Willis Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphjet Technology 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 Graphjet Technology 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 Commodity Directory module to find actively traded commodities issued by global exchanges.