Correlation Between SFL and Willscot Mobile

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

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

Diversification Opportunities for SFL and Willscot Mobile

0.25

Correlation Coefficient

SFL  Willscot Mobile

Modest diversification

The 3 months correlation between SFL and Willscot is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. 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 SFL 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 SFL Corporation 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 SFL i.e., SFL and Willscot Mobile go up and down completely randomly.

Pair Corralation between SFL and Willscot Mobile

Considering the 90-day investment horizon SFL Corporation is expected to under-perform the Willscot Mobile. But the stock apears to be less risky and, when comparing its historical volatility, SFL Corporation is 1.41 times less risky than Willscot Mobile. The stock trades about -0.01 of its potential returns per unit of risk. The Willscot Mobile Mini is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,506  in Willscot Mobile Mini on December 3, 2024 and sell it today you would lose (333.00) from holding Willscot Mobile Mini or give up 9.5% of portfolio value over 90 days.

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

SFL Corp.  vs.  Willscot Mobile Mini

SFL Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days SFL Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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 SFL and Willscot Mobile

The main advantage of trading using opposite SFL and Willscot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL 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 SFL Corporation 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.