Correlation Between WillScot Mobile and Singapore Telecommunicatio

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

Diversification Opportunities for WillScot Mobile and Singapore Telecommunicatio

0.15

Correlation Coefficient

WillScot Mobile  Singapore Telecommunicatio

Average diversification

The 3 months correlation between WillScot and Singapore is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding WillScot Mobile Mini and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio 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 Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of WillScot Mobile i.e., WillScot Mobile and Singapore Telecommunicatio go up and down completely randomly.

Pair Corralation between WillScot Mobile and Singapore Telecommunicatio

Assuming the 90 days trading horizon WillScot Mobile Mini is expected to generate 2.02 times more return on investment than Singapore Telecommunicatio. However, WillScot Mobile is 2.02 times more volatile than Singapore Telecommunications Limited. It trades about 0.04 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.03 per unit of risk. If you would invest  3,440  in WillScot Mobile Mini on August 31, 2024 and sell it today you would earn a total of  200.00  from holding WillScot Mobile Mini or generate 5.81% return on investment over 90 days.

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

WillScot Mobile Mini  vs.  Singapore Telecommunications L

WillScot Mobile Mini

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WillScot Mobile Mini are ranked lower than 3 (%) 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.

Singapore Telecommunicatio

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Telecommunications Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Singapore Telecommunicatio is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with WillScot Mobile and Singapore Telecommunicatio

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

The idea behind WillScot Mobile Mini and Singapore Telecommunications Limited 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.