Correlation Between WillScot Mobile and Peel Mining

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

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

Diversification Opportunities for WillScot Mobile and Peel Mining

0.73

Correlation Coefficient

WillScot Mobile  Peel Mining

Poor diversification

The 3 months correlation between WillScot and Peel is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding WillScot Mobile Mini and Peel Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining Limited and WillScot Mobile 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 WillScot Mobile Mini are associated (or correlated) with Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining Limited has no effect on the direction of WillScot Mobile i.e., WillScot Mobile and Peel Mining go up and down completely randomly.

Pair Corralation between WillScot Mobile and Peel Mining

Assuming the 90 days trading horizon WillScot Mobile Mini is expected to generate 0.54 times more return on investment than Peel Mining. However, WillScot Mobile Mini is 1.86 times less risky than Peel Mining. It trades about -0.1 of its potential returns per unit of risk. Peel Mining Limited is currently generating about -0.11 per unit of risk. If you would invest  3,173  in WillScot Mobile Mini on December 29, 2024 and sell it today you would lose (493.00) from holding WillScot Mobile Mini or give up 15.54% of portfolio value over 90 days.

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

WillScot Mobile Mini  vs.  Peel Mining Limited

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. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Peel Mining Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peel Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with WillScot Mobile and Peel Mining

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

The idea behind WillScot Mobile Mini and Peel Mining Limited 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.