Correlation Between Gap, and Willscot Mobile

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

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

Diversification Opportunities for Gap, and Willscot Mobile

-0.09

Correlation Coefficient

Gap,  Willscot Mobile

Good diversification

The 3 months correlation between Gap, and Willscot is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, 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 Gap, 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 The Gap, 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 Gap, i.e., Gap, and Willscot Mobile go up and down completely randomly.

Pair Corralation between Gap, and Willscot Mobile

Considering the 90-day investment horizon The Gap, is expected to generate 0.75 times more return on investment than Willscot Mobile. However, The Gap, is 1.33 times less risky than Willscot Mobile. It trades about -0.22 of its potential returns per unit of risk. Willscot Mobile Mini is currently generating about -0.23 per unit of risk. If you would invest  2,579  in The Gap, on October 4, 2024 and sell it today you would lose (216.00) from holding The Gap, or give up 8.38% of portfolio value over 90 days.

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

The Gap,  vs.  Willscot Mobile Mini

Gap,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Willscot Mobile Mini

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Willscot Mobile Mini has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Gap, and Willscot Mobile

The main advantage of trading using opposite Gap, and Willscot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, 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 The Gap, 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .