Correlation Between GMS and Willscot Mobile

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

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

Diversification Opportunities for GMS and Willscot Mobile

-0.19

Correlation Coefficient

GMS  Willscot Mobile

Good diversification

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

Pair Corralation between GMS and Willscot Mobile

Considering the 90-day investment horizon GMS Inc is expected to generate 0.57 times more return on investment than Willscot Mobile. However, GMS Inc is 1.76 times less risky than Willscot Mobile. It trades about 0.03 of its potential returns per unit of risk. Willscot Mobile Mini is currently generating about -0.04 per unit of risk. If you would invest  8,917  in GMS Inc on September 16, 2024 and sell it today you would earn a total of  183.00  from holding GMS Inc or generate 2.05% return on investment over 90 days.

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

GMS Inc  vs.  Willscot Mobile Mini

GMS Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GMS Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, GMS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 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.

Pair Trading with GMS and Willscot Mobile

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

The idea behind GMS Inc and Willscot Mobile Mini 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.