Correlation Between Northstar Clean and Willscot Mobile

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

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

Diversification Opportunities for Northstar Clean and Willscot Mobile

-0.32

Correlation Coefficient

Northstar Clean  Willscot Mobile

Very good diversification

The 3 months correlation between Northstar and Willscot is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies 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 Northstar Clean 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 Northstar Clean Technologies 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 Northstar Clean i.e., Northstar Clean and Willscot Mobile go up and down completely randomly.

Pair Corralation between Northstar Clean and Willscot Mobile

Assuming the 90 days horizon Northstar Clean Technologies is expected to generate 1.98 times more return on investment than Willscot Mobile. However, Northstar Clean is 1.98 times more volatile than Willscot Mobile Mini. It trades about 0.09 of its potential returns per unit of risk. Willscot Mobile Mini is currently generating about 0.0 per unit of risk. If you would invest  9.01  in Northstar Clean Technologies on December 3, 2024 and sell it today you would earn a total of  14.99  from holding Northstar Clean Technologies or generate 166.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.7%
Values	Daily Returns

Northstar Clean Technologies  vs.  Willscot Mobile Mini

Northstar Clean Tech

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Northstar Clean Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Northstar Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Willscot Mobile Mini

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Northstar Clean and Willscot Mobile

The main advantage of trading using opposite Northstar Clean and Willscot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean 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 Northstar Clean Technologies 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.