Correlation Between WillScot Mobile and TC Energy

Can any of the company-specific risk be diversified away by investing in both WillScot Mobile and TC Energy 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 TC Energy 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 TC Energy, you can compare the effects of market volatilities on WillScot Mobile and TC Energy 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 TC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of WillScot Mobile and TC Energy.

Diversification Opportunities for WillScot Mobile and TC Energy

0.04

Correlation Coefficient

WillScot Mobile  TC Energy

Significant diversification

The 3 months correlation between WillScot and TRS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding WillScot Mobile Mini and TC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy 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 TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy has no effect on the direction of WillScot Mobile i.e., WillScot Mobile and TC Energy go up and down completely randomly.

Pair Corralation between WillScot Mobile and TC Energy

Assuming the 90 days trading horizon WillScot Mobile Mini is expected to generate 2.02 times more return on investment than TC Energy. However, WillScot Mobile is 2.02 times more volatile than TC Energy. It trades about 0.19 of its potential returns per unit of risk. TC Energy is currently generating about -0.01 per unit of risk. If you would invest  1,885  in WillScot Mobile Mini on April 22, 2025 and sell it today you would earn a total of  695.00  from holding WillScot Mobile Mini or generate 36.87% return on investment over 90 days.

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

WillScot Mobile Mini  vs.  TC Energy

WillScot Mobile Mini

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WillScot Mobile Mini are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, WillScot Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

TC Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days TC Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TC Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with WillScot Mobile and TC Energy

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

The idea behind WillScot Mobile Mini and TC Energy 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.