Correlation Between Willscot Mobile and Sandstorm Gold

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

Diversification Opportunities for Willscot Mobile and Sandstorm Gold

-0.31

Correlation Coefficient

Willscot Mobile  Sandstorm Gold

Very good diversification

The 3 months correlation between Willscot and Sandstorm is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Willscot Mobile Mini and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold 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 Sandstorm Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandstorm Gold has no effect on the direction of Willscot Mobile i.e., Willscot Mobile and Sandstorm Gold go up and down completely randomly.

Pair Corralation between Willscot Mobile and Sandstorm Gold

Considering the 90-day investment horizon Willscot Mobile Mini is expected to under-perform the Sandstorm Gold. In addition to that, Willscot Mobile is 1.24 times more volatile than Sandstorm Gold Ltd. It trades about -0.07 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.19 per unit of volatility. If you would invest  544.00  in Sandstorm Gold Ltd on December 24, 2024 and sell it today you would earn a total of  135.00  from holding Sandstorm Gold Ltd or generate 24.82% 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.  Sandstorm Gold Ltd

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 latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Sandstorm Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sandstorm Gold Ltd are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Sandstorm Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Willscot Mobile and Sandstorm Gold

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

The idea behind Willscot Mobile Mini and Sandstorm Gold Ltd 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.