Correlation Between WillScot Mobile and Merck
Can any of the company-specific risk be diversified away by investing in both WillScot Mobile and Merck 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 Merck 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 Merck Company, you can compare the effects of market volatilities on WillScot Mobile and Merck 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 Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of WillScot Mobile and Merck.
Diversification Opportunities for WillScot Mobile and Merck
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between WillScot and Merck is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding WillScot Mobile Mini and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company 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 Merck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck Company has no effect on the direction of WillScot Mobile i.e., WillScot Mobile and Merck go up and down completely randomly.
Pair Corralation between WillScot Mobile and Merck
Assuming the 90 days trading horizon WillScot Mobile Mini is expected to generate 2.28 times more return on investment than Merck. However, WillScot Mobile is 2.28 times more volatile than Merck Company. It trades about 0.03 of its potential returns per unit of risk. Merck Company is currently generating about -0.3 per unit of risk. If you would invest 3,640 in WillScot Mobile Mini on September 12, 2024 and sell it today you would earn a total of 40.00 from holding WillScot Mobile Mini or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
WillScot Mobile Mini vs. Merck Company
Performance |
| Timeline |
| WillScot Mobile Mini |
| Merck Company |
WillScot Mobile and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WillScot Mobile and Merck
The main advantage of trading using opposite WillScot Mobile and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WillScot Mobile position performs unexpectedly, Merck 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 Merck will offset losses from the drop in Merck's long position.| WillScot Mobile vs. United Rentals | WillScot Mobile vs. Superior Plus Corp | WillScot Mobile vs. SIVERS SEMICONDUCTORS AB | WillScot Mobile vs. Norsk Hydro ASA |
| Merck vs. PUBLIC STORAGE PRFO | Merck vs. Associated British Foods | Merck vs. SENECA FOODS A | Merck vs. Food Life Companies |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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