Correlation Between Baldwin Insurance and Willscot Mobile

Can any of the company-specific risk be diversified away by investing in both Baldwin Insurance and Willscot Mobile 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 Baldwin Insurance and Willscot Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Baldwin Insurance and Willscot Mobile Mini, you can compare the effects of market volatilities on Baldwin Insurance and Willscot Mobile 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 Baldwin Insurance with a short position of Willscot Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baldwin Insurance and Willscot Mobile.

Diversification Opportunities for Baldwin Insurance and Willscot Mobile

0.41

Correlation Coefficient

Baldwin Insurance  Willscot Mobile

Very weak diversification

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

Pair Corralation between Baldwin Insurance and Willscot Mobile

Given the investment horizon of 90 days The Baldwin Insurance is expected to under-perform the Willscot Mobile. But the stock apears to be less risky and, when comparing its historical volatility, The Baldwin Insurance is 1.05 times less risky than Willscot Mobile. The stock trades about -0.14 of its potential returns per unit of risk. The Willscot Mobile Mini is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  3,897  in Willscot Mobile Mini on September 25, 2024 and sell it today you would lose (515.00) from holding Willscot Mobile Mini or give up 13.22% of portfolio value over 90 days.

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

The Baldwin Insurance  vs.  Willscot Mobile Mini

Baldwin Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Baldwin Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Baldwin Insurance and Willscot Mobile

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

The idea behind The Baldwin Insurance and Willscot Mobile Mini 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.