Correlation Between WillScot Mobile and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both WillScot Mobile and X-FAB Silicon 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 X-FAB Silicon 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on WillScot Mobile and X-FAB Silicon 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 X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of WillScot Mobile and X-FAB Silicon.
Diversification Opportunities for WillScot Mobile and X-FAB Silicon
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between WillScot and X-FAB is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding WillScot Mobile Mini and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X-FAB Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of WillScot Mobile i.e., WillScot Mobile and X-FAB Silicon go up and down completely randomly.
Pair Corralation between WillScot Mobile and X-FAB Silicon
Assuming the 90 days trading horizon WillScot Mobile Mini is expected to generate 0.94 times more return on investment than X-FAB Silicon. However, WillScot Mobile Mini is 1.06 times less risky than X-FAB Silicon. It trades about -0.02 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.03 per unit of risk. If you would invest 4,420 in WillScot Mobile Mini on December 2, 2024 and sell it today you would lose (1,300) from holding WillScot Mobile Mini or give up 29.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WillScot Mobile Mini vs. X FAB Silicon Foundries
Performance |
| Timeline |
| WillScot Mobile Mini |
| X FAB Silicon |
WillScot Mobile and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WillScot Mobile and X-FAB Silicon
The main advantage of trading using opposite WillScot Mobile and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WillScot Mobile position performs unexpectedly, X-FAB Silicon 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 X-FAB Silicon will offset losses from the drop in X-FAB Silicon's long position.| WillScot Mobile vs. Ming Le Sports | ||
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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