Correlation Between WillScot Mobile and AECOM TECHNOLOGY

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

Diversification Opportunities for WillScot Mobile and AECOM TECHNOLOGY

0.32

Correlation Coefficient

WillScot Mobile  AECOM TECHNOLOGY

Weak diversification

The 3 months correlation between WillScot and AECOM is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding WillScot Mobile Mini and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of WillScot Mobile i.e., WillScot Mobile and AECOM TECHNOLOGY go up and down completely randomly.

Pair Corralation between WillScot Mobile and AECOM TECHNOLOGY

Assuming the 90 days trading horizon WillScot Mobile Mini is expected to under-perform the AECOM TECHNOLOGY. In addition to that, WillScot Mobile is 4.02 times more volatile than AECOM TECHNOLOGY. It trades about -0.14 of its total potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about -0.51 per unit of volatility. If you would invest  11,100  in AECOM TECHNOLOGY on September 24, 2024 and sell it today you would lose (800.00) from holding AECOM TECHNOLOGY or give up 7.21% of portfolio value over 90 days.

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

WillScot Mobile Mini  vs.  AECOM TECHNOLOGY

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. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

AECOM TECHNOLOGY

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AECOM TECHNOLOGY are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, AECOM TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with WillScot Mobile and AECOM TECHNOLOGY

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

The idea behind WillScot Mobile Mini and AECOM TECHNOLOGY 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.