Correlation Between Willscot Mobile and Global Ship

Can any of the company-specific risk be diversified away by investing in both Willscot Mobile and Global Ship 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 Global Ship 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 Global Ship Lease, you can compare the effects of market volatilities on Willscot Mobile and Global Ship 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 Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willscot Mobile and Global Ship.

Diversification Opportunities for Willscot Mobile and Global Ship

-0.22

Correlation Coefficient

Willscot Mobile  Global Ship

Very good diversification

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

Pair Corralation between Willscot Mobile and Global Ship

Considering the 90-day investment horizon Willscot Mobile Mini is expected to under-perform the Global Ship. In addition to that, Willscot Mobile is 4.33 times more volatile than Global Ship Lease. It trades about -0.07 of its total potential returns per unit of risk. Global Ship Lease is currently generating about 0.19 per unit of volatility. If you would invest  2,557  in Global Ship Lease on September 22, 2024 and sell it today you would earn a total of  69.00  from holding Global Ship Lease or generate 2.7% return on investment over 90 days.

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

Willscot Mobile Mini  vs.  Global Ship Lease

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

Global Ship Lease

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Global Ship is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Willscot Mobile and Global Ship

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

The idea behind Willscot Mobile Mini and Global Ship Lease 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.