Correlation Between WillScot Mobile and Major Drilling
Can any of the company-specific risk be diversified away by investing in both WillScot Mobile and Major Drilling 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 Major Drilling 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 Major Drilling Group, you can compare the effects of market volatilities on WillScot Mobile and Major Drilling 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 Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of WillScot Mobile and Major Drilling.
Diversification Opportunities for WillScot Mobile and Major Drilling
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WillScot and Major is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding WillScot Mobile Mini and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group 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 Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of WillScot Mobile i.e., WillScot Mobile and Major Drilling go up and down completely randomly.
Pair Corralation between WillScot Mobile and Major Drilling
Assuming the 90 days trading horizon WillScot Mobile is expected to generate 1.6 times less return on investment than Major Drilling. In addition to that, WillScot Mobile is 1.2 times more volatile than Major Drilling Group. It trades about 0.05 of its total potential returns per unit of risk. Major Drilling Group is currently generating about 0.09 per unit of volatility. If you would invest 550.00 in Major Drilling Group on October 30, 2024 and sell it today you would earn a total of 35.00 from holding Major Drilling Group or generate 6.36% 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. Major Drilling Group
Performance |
| Timeline |
| WillScot Mobile Mini |
| Major Drilling Group |
WillScot Mobile and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WillScot Mobile and Major Drilling
The main advantage of trading using opposite WillScot Mobile and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WillScot Mobile position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| WillScot Mobile vs. Nanjing Panda Electronics | WillScot Mobile vs. Methode Electronics | WillScot Mobile vs. Aedas Homes SA | WillScot Mobile vs. Arrow Electronics |
| Major Drilling vs. Vienna Insurance Group | Major Drilling vs. ZURICH INSURANCE GROUP | Major Drilling vs. Direct Line Insurance | Major Drilling vs. CREO MEDICAL GRP |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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