Correlation Between Mega Matrix and Willis Lease

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

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

Diversification Opportunities for Mega Matrix and Willis Lease

0.64

Correlation Coefficient

Mega Matrix  Willis Lease

Poor diversification

The 3 months correlation between Mega and Willis is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mega Matrix Corp 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 Mega Matrix 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 Mega Matrix Corp 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 Mega Matrix i.e., Mega Matrix and Willis Lease go up and down completely randomly.

Pair Corralation between Mega Matrix and Willis Lease

Considering the 90-day investment horizon Mega Matrix is expected to generate 2.22 times less return on investment than Willis Lease. In addition to that, Mega Matrix is 2.24 times more volatile than Willis Lease Finance. It trades about 0.02 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  5,690  in Willis Lease Finance on October 11, 2024 and sell it today you would earn a total of  15,525  from holding Willis Lease Finance or generate 272.85% return on investment over 90 days.

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

Mega Matrix Corp  vs.  Willis Lease Finance

Mega Matrix Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mega Matrix Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mega Matrix is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Willis Lease Finance

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Willis Lease Finance are ranked lower than 7 (%) 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 Mega Matrix and Willis Lease

The main advantage of trading using opposite Mega Matrix and Willis Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Matrix 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 Mega Matrix Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.