Correlation Between SGS SA and Willscot Mobile

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

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

Diversification Opportunities for SGS SA and Willscot Mobile

0.31

Correlation Coefficient

SGS SA  Willscot Mobile

Weak diversification

The 3 months correlation between SGS and Willscot is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SGS SA 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 SGS SA 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 SGS SA 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 SGS SA i.e., SGS SA and Willscot Mobile go up and down completely randomly.

Pair Corralation between SGS SA and Willscot Mobile

Assuming the 90 days horizon SGS SA is expected to under-perform the Willscot Mobile. But the pink sheet apears to be less risky and, when comparing its historical volatility, SGS SA is 2.34 times less risky than Willscot Mobile. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Willscot Mobile Mini is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  3,885  in Willscot Mobile Mini on September 19, 2024 and sell it today you would lose (237.00) from holding Willscot Mobile Mini or give up 6.1% of portfolio value over 90 days.

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

SGS SA  vs.  Willscot Mobile Mini

SGS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SGS SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company 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 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 SGS SA and Willscot Mobile

The main advantage of trading using opposite SGS SA and Willscot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGS SA 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 SGS SA 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .