Correlation Between Equifax and TransUnion
Can any of the company-specific risk be diversified away by investing in both Equifax and TransUnion 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 Equifax and TransUnion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equifax and TransUnion, you can compare the effects of market volatilities on Equifax and TransUnion 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 Equifax with a short position of TransUnion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equifax and TransUnion.
Diversification Opportunities for Equifax and TransUnion
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Equifax and TransUnion is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Equifax and TransUnion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransUnion and Equifax 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 Equifax are associated (or correlated) with TransUnion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransUnion has no effect on the direction of Equifax i.e., Equifax and TransUnion go up and down completely randomly.
Pair Corralation between Equifax and TransUnion
Considering the 90-day investment horizon Equifax is expected to under-perform the TransUnion. But the stock apears to be less risky and, when comparing its historical volatility, Equifax is 1.16 times less risky than TransUnion. The stock trades about -0.17 of its potential returns per unit of risk. The TransUnion is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 10,357 in TransUnion on August 27, 2024 and sell it today you would lose (444.00) from holding TransUnion or give up 4.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equifax vs. TransUnion
Performance |
| Timeline |
| Equifax |
| TransUnion |
Equifax and TransUnion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equifax and TransUnion
The main advantage of trading using opposite Equifax and TransUnion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equifax position performs unexpectedly, TransUnion 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 TransUnion will offset losses from the drop in TransUnion's long position.| Equifax vs. Verisk Analytics | Equifax vs. Exponent | Equifax vs. FTI Consulting | Equifax vs. Franklin Covey |
| TransUnion vs. Exponent | TransUnion vs. Verisk Analytics | TransUnion vs. FTI Consulting | TransUnion vs. Forrester Research |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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