Correlation Between Willis Lease and U-Haul Holding

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

Diversification Opportunities for Willis Lease and U-Haul Holding

-0.52

Correlation Coefficient

Willis Lease  U-Haul Holding

Excellent diversification

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

Pair Corralation between Willis Lease and U-Haul Holding

Given the investment horizon of 90 days Willis Lease Finance is expected to generate 2.74 times more return on investment than U-Haul Holding. However, Willis Lease is 2.74 times more volatile than U Haul Holding. It trades about 0.29 of its potential returns per unit of risk. U Haul Holding is currently generating about -0.05 per unit of risk. If you would invest  10,320  in Willis Lease Finance on September 4, 2024 and sell it today you would earn a total of  10,852  from holding Willis Lease Finance or generate 105.16% 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 Finance  vs.  U Haul Holding

Willis Lease Finance

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Willis Lease Finance are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Willis Lease exhibited solid returns over the last few months and may actually be approaching a breakup point.

U Haul Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days U Haul Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, U-Haul Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Willis Lease and U-Haul Holding

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

The idea behind Willis Lease Finance and U Haul Holding 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.