Correlation Between Willis Lease and Enbridge 6375

Can any of the company-specific risk be diversified away by investing in both Willis Lease and Enbridge 6375 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 Enbridge 6375 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 Enbridge 6375 Fixed, you can compare the effects of market volatilities on Willis Lease and Enbridge 6375 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 Enbridge 6375. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willis Lease and Enbridge 6375.

Diversification Opportunities for Willis Lease and Enbridge 6375

0.42

Correlation Coefficient

Willis Lease  Enbridge 6375

Very weak diversification

The 3 months correlation between Willis and Enbridge is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Willis Lease Finance and Enbridge 6375 Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge 6375 Fixed 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 Enbridge 6375. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge 6375 Fixed has no effect on the direction of Willis Lease i.e., Willis Lease and Enbridge 6375 go up and down completely randomly.

Pair Corralation between Willis Lease and Enbridge 6375

If you would invest  18,468  in Willis Lease Finance on October 25, 2024 and sell it today you would earn a total of  1,068  from holding Willis Lease Finance or generate 5.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.67%
Values	Daily Returns

Willis Lease Finance  vs.  Enbridge 6375 Fixed

Willis Lease Finance

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Willis Lease Finance are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Willis Lease may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Enbridge 6375 Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enbridge 6375 Fixed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Enbridge 6375 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Willis Lease and Enbridge 6375

The main advantage of trading using opposite Willis Lease and Enbridge 6375 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willis Lease position performs unexpectedly, Enbridge 6375 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 Enbridge 6375 will offset losses from the drop in Enbridge 6375's long position.

The idea behind Willis Lease Finance and Enbridge 6375 Fixed 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.