Correlation Between Willscot Mobile and SM Investments

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

Diversification Opportunities for Willscot Mobile and SM Investments

-0.19

Correlation Coefficient

Willscot Mobile  SM Investments

Good diversification

The 3 months correlation between Willscot and SVTMF is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Willscot Mobile Mini and SM Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Investments 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 SM Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Investments has no effect on the direction of Willscot Mobile i.e., Willscot Mobile and SM Investments go up and down completely randomly.

Pair Corralation between Willscot Mobile and SM Investments

Considering the 90-day investment horizon Willscot Mobile Mini is expected to generate 1.8 times more return on investment than SM Investments. However, Willscot Mobile is 1.8 times more volatile than SM Investments. It trades about 0.02 of its potential returns per unit of risk. SM Investments is currently generating about 0.0 per unit of risk. If you would invest  3,897  in Willscot Mobile Mini on October 25, 2024 and sell it today you would earn a total of  21.00  from holding Willscot Mobile Mini or generate 0.54% 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.  SM Investments

Willscot Mobile Mini

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Willscot Mobile Mini are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

SM Investments

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days SM Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, SM Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Willscot Mobile and SM Investments

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

The idea behind Willscot Mobile Mini and SM Investments 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..