Correlation Between Willscot Mobile and United Guardian

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

Diversification Opportunities for Willscot Mobile and United Guardian

0.41

Correlation Coefficient

Willscot Mobile  United Guardian

Very weak diversification

The 3 months correlation between Willscot and United is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Willscot Mobile Mini and United Guardian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Guardian 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 United Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Guardian has no effect on the direction of Willscot Mobile i.e., Willscot Mobile and United Guardian go up and down completely randomly.

Pair Corralation between Willscot Mobile and United Guardian

Considering the 90-day investment horizon Willscot Mobile Mini is expected to under-perform the United Guardian. In addition to that, Willscot Mobile is 1.53 times more volatile than United Guardian. It trades about -0.25 of its total potential returns per unit of risk. United Guardian is currently generating about 0.02 per unit of volatility. If you would invest  960.00  in United Guardian on September 27, 2024 and sell it today you would earn a total of  5.00  from holding United Guardian or generate 0.52% return on investment over 90 days.

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

Willscot Mobile Mini  vs.  United Guardian

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 latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

United Guardian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Guardian has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Willscot Mobile and United Guardian

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

The idea behind Willscot Mobile Mini and United Guardian 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.