Correlation Between Willscot Mobile and Peoples Insurance

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

Diversification Opportunities for Willscot Mobile and Peoples Insurance

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Willscot and Peoples is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Willscot Mobile Mini and The Peoples Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance 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 Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance has no effect on the direction of Willscot Mobile i.e., Willscot Mobile and Peoples Insurance go up and down completely randomly.

Pair Corralation between Willscot Mobile and Peoples Insurance

Considering the 90-day investment horizon Willscot Mobile Mini is expected to under-perform the Peoples Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Willscot Mobile Mini is 2.45 times less risky than Peoples Insurance. The stock trades about -0.02 of its potential returns per unit of risk. The The Peoples Insurance is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  11.00  in The Peoples Insurance on October 5, 2024 and sell it today you would earn a total of  25.00  from holding The Peoples Insurance or generate 227.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Willscot Mobile Mini  vs.  The Peoples Insurance

 Performance 
       Timeline  
Willscot Mobile Mini 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 rather sound basic indicators, Willscot Mobile is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Peoples Insurance 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in The Peoples Insurance are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Peoples Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Willscot Mobile and Peoples Insurance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Willscot Mobile and Peoples Insurance

The main advantage of trading using opposite Willscot Mobile and Peoples Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willscot Mobile position performs unexpectedly, Peoples Insurance 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 Peoples Insurance will offset losses from the drop in Peoples Insurance's long position.
The idea behind Willscot Mobile Mini and The Peoples Insurance 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.
Check out your portfolio center.
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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