Correlation Between Life Time and Willscot Mobile

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

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

Diversification Opportunities for Life Time and Willscot Mobile

0.15

Correlation Coefficient

Life Time  Willscot Mobile

Average diversification

The 3 months correlation between Life and Willscot is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group 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 Life Time 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 Life Time Group 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 Life Time i.e., Life Time and Willscot Mobile go up and down completely randomly.

Pair Corralation between Life Time and Willscot Mobile

Considering the 90-day investment horizon Life Time is expected to generate 1.15 times less return on investment than Willscot Mobile. But when comparing it to its historical volatility, Life Time Group is 1.5 times less risky than Willscot Mobile. It trades about 0.04 of its potential returns per unit of risk. Willscot Mobile Mini is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,725  in Willscot Mobile Mini on September 3, 2024 and sell it today you would earn a total of  99.00  from holding Willscot Mobile Mini or generate 2.66% return on investment over 90 days.

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

Life Time Group  vs.  Willscot Mobile Mini

Life Time Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Life Time Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Life Time is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Willscot Mobile Mini

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Willscot Mobile Mini are ranked lower than 2 (%) 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.

Pair Trading with Life Time and Willscot Mobile

The main advantage of trading using opposite Life Time and Willscot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time 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 Life Time Group 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.