Correlation Between WillScot Mobile and SYSTEMAIR

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

Diversification Opportunities for WillScot Mobile and SYSTEMAIR

0.2

Correlation Coefficient

WillScot Mobile  SYSTEMAIR

Modest diversification

The 3 months correlation between WillScot and SYSTEMAIR is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding WillScot Mobile Mini and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB 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 SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of WillScot Mobile i.e., WillScot Mobile and SYSTEMAIR go up and down completely randomly.

Pair Corralation between WillScot Mobile and SYSTEMAIR

Assuming the 90 days trading horizon WillScot Mobile is expected to generate 1.86 times less return on investment than SYSTEMAIR. In addition to that, WillScot Mobile is 1.84 times more volatile than SYSTEMAIR AB. It trades about 0.04 of its total potential returns per unit of risk. SYSTEMAIR AB is currently generating about 0.12 per unit of volatility. If you would invest  687.00  in SYSTEMAIR AB on September 1, 2024 and sell it today you would earn a total of  95.00  from holding SYSTEMAIR AB or generate 13.83% return on investment over 90 days.

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

WillScot Mobile Mini  vs.  SYSTEMAIR AB

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. Despite nearly fragile basic indicators, WillScot Mobile may actually be approaching a critical reversion point that can send shares even higher in December 2024.

SYSTEMAIR AB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SYSTEMAIR AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SYSTEMAIR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WillScot Mobile and SYSTEMAIR

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

The idea behind WillScot Mobile Mini and SYSTEMAIR AB 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.