Correlation Between Willis Lease and ERecord Management

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

Diversification Opportunities for Willis Lease and ERecord Management

0.0

Correlation Coefficient

Willis Lease  ERecord Management

Pay attention - limited upside

The 3 months correlation between Willis and ERecord is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Willis Lease Finance and ERecord Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ERecord Management 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 ERecord Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ERecord Management has no effect on the direction of Willis Lease i.e., Willis Lease and ERecord Management go up and down completely randomly.

Pair Corralation between Willis Lease and ERecord Management

If you would invest  0.02  in ERecord Management on October 24, 2024 and sell it today you would earn a total of  0.00  from holding ERecord Management or generate 0.0% return on investment over 90 days.

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

Willis Lease Finance  vs.  ERecord Management

Willis Lease Finance

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Willis Lease Finance are ranked lower than 4 (%) 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.

ERecord Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ERecord Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, ERecord Management 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 ERecord Management

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

The idea behind Willis Lease Finance and ERecord Management 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.