Correlation Between WillScot Mobile and Ross Stores
Can any of the company-specific risk be diversified away by investing in both WillScot Mobile and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on WillScot Mobile and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of WillScot Mobile and Ross Stores.
Diversification Opportunities for WillScot Mobile and Ross Stores
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between WillScot and Ross is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding WillScot Mobile Mini and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of WillScot Mobile i.e., WillScot Mobile and Ross Stores go up and down completely randomly.
Pair Corralation between WillScot Mobile and Ross Stores
Assuming the 90 days trading horizon WillScot Mobile is expected to generate 1.11 times less return on investment than Ross Stores. In addition to that, WillScot Mobile is 1.65 times more volatile than Ross Stores. It trades about 0.04 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.08 per unit of volatility. If you would invest 12,445 in Ross Stores on November 3, 2024 and sell it today you would earn a total of 2,051 from holding Ross Stores or generate 16.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WillScot Mobile Mini vs. Ross Stores
Performance |
| Timeline |
| WillScot Mobile Mini |
| Ross Stores |
WillScot Mobile and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WillScot Mobile and Ross Stores
The main advantage of trading using opposite WillScot Mobile and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WillScot Mobile position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| WillScot Mobile vs. United Rentals | WillScot Mobile vs. Ashtead Group plc | WillScot Mobile vs. AMERCO | WillScot Mobile vs. Avis Budget Group |
| Ross Stores vs. Insurance Australia Group | Ross Stores vs. Goodyear Tire Rubber | Ross Stores vs. ZURICH INSURANCE GROUP | Ross Stores vs. Direct Line Insurance |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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