Correlation Between INTER CARS and WillScot Mobile

Can any of the company-specific risk be diversified away by investing in both INTER CARS and WillScot Mobile 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 INTER CARS and WillScot Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INTER CARS SA and WillScot Mobile Mini, you can compare the effects of market volatilities on INTER CARS and WillScot Mobile 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 INTER CARS with a short position of WillScot Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and WillScot Mobile.

Diversification Opportunities for INTER CARS and WillScot Mobile

0.22

Correlation Coefficient

INTER CARS  WillScot Mobile

Modest diversification

The 3 months correlation between INTER and WillScot is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and WillScot Mobile Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WillScot Mobile Mini and INTER CARS 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 INTER CARS SA are associated (or correlated) with WillScot Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WillScot Mobile Mini has no effect on the direction of INTER CARS i.e., INTER CARS and WillScot Mobile go up and down completely randomly.

Pair Corralation between INTER CARS and WillScot Mobile

Assuming the 90 days horizon INTER CARS is expected to generate 3.3 times less return on investment than WillScot Mobile. But when comparing it to its historical volatility, INTER CARS SA is 1.8 times less risky than WillScot Mobile. It trades about 0.01 of its potential returns per unit of risk. WillScot Mobile Mini is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,500  in WillScot Mobile Mini on September 14, 2024 and sell it today you would lose (20.00) from holding WillScot Mobile Mini or give up 0.57% of portfolio value over 90 days.

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

INTER CARS SA  vs.  WillScot Mobile Mini

INTER CARS SA

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days INTER CARS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, INTER CARS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WillScot Mobile Mini

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with INTER CARS and WillScot Mobile

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

The idea behind INTER CARS SA and WillScot Mobile Mini 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.