Correlation Between SGS SA and TransUnion
Can any of the company-specific risk be diversified away by investing in both SGS SA 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 SGS SA and TransUnion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SGS SA and TransUnion, you can compare the effects of market volatilities on SGS SA 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 SGS SA with a short position of TransUnion. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGS SA and TransUnion.
Diversification Opportunities for SGS SA and TransUnion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SGS and TransUnion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SGS SA and TransUnion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransUnion and SGS SA 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 SGS SA 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 SGS SA i.e., SGS SA and TransUnion go up and down completely randomly.
Pair Corralation between SGS SA and TransUnion
Assuming the 90 days horizon SGS SA is expected to generate 2.64 times less return on investment than TransUnion. In addition to that, SGS SA is 1.41 times more volatile than TransUnion. It trades about 0.03 of its total potential returns per unit of risk. TransUnion is currently generating about 0.12 per unit of volatility. If you would invest 7,494 in TransUnion on August 24, 2024 and sell it today you would earn a total of 2,376 from holding TransUnion or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SGS SA vs. TransUnion
Performance |
| Timeline |
| SGS SA |
| TransUnion |
SGS SA and TransUnion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SGS SA and TransUnion
The main advantage of trading using opposite SGS SA and TransUnion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGS SA 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.The idea behind SGS SA and TransUnion 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.| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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