Correlation Between WILLIS LEASE and Bolloré SE

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

By analyzing existing cross correlation between WILLIS LEASE FIN and Bollor SE, you can compare the effects of market volatilities on WILLIS LEASE and Bolloré SE 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 Bolloré SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and Bolloré SE.

Diversification Opportunities for WILLIS LEASE and Bolloré SE

-0.52

Correlation Coefficient

WILLIS LEASE  Bolloré SE

Excellent diversification

The 3 months correlation between WILLIS and Bolloré is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and Bollor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolloré SE 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 FIN are associated (or correlated) with Bolloré SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolloré SE has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and Bolloré SE go up and down completely randomly.

Pair Corralation between WILLIS LEASE and Bolloré SE

Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 3.36 times more return on investment than Bolloré SE. However, WILLIS LEASE is 3.36 times more volatile than Bollor SE. It trades about 0.13 of its potential returns per unit of risk. Bollor SE is currently generating about 0.03 per unit of risk. If you would invest  19,000  in WILLIS LEASE FIN on October 8, 2024 and sell it today you would earn a total of  1,400  from holding WILLIS LEASE FIN or generate 7.37% return on investment over 90 days.

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

WILLIS LEASE FIN  vs.  Bollor SE

WILLIS LEASE FIN

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WILLIS LEASE FIN are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WILLIS LEASE reported solid returns over the last few months and may actually be approaching a breakup point.

Bolloré SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bollor SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Bolloré SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with WILLIS LEASE and Bolloré SE

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

The idea behind WILLIS LEASE FIN and Bollor SE 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.