Correlation Between TransUnion and Equifax
Can any of the company-specific risk be diversified away by investing in both TransUnion and Equifax 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 TransUnion and Equifax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransUnion and Equifax, you can compare the effects of market volatilities on TransUnion and Equifax 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 TransUnion with a short position of Equifax. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransUnion and Equifax.
Diversification Opportunities for TransUnion and Equifax
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between TransUnion and Equifax is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding TransUnion and Equifax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equifax and TransUnion 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 TransUnion are associated (or correlated) with Equifax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equifax has no effect on the direction of TransUnion i.e., TransUnion and Equifax go up and down completely randomly.
Pair Corralation between TransUnion and Equifax
Considering the 90-day investment horizon TransUnion is expected to generate 1.16 times more return on investment than Equifax. However, TransUnion is 1.16 times more volatile than Equifax. It trades about -0.1 of its potential returns per unit of risk. Equifax is currently generating about -0.17 per unit of risk. 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 |
TransUnion vs. Equifax
Performance |
| Timeline |
| TransUnion |
| Equifax |
TransUnion and Equifax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TransUnion and Equifax
The main advantage of trading using opposite TransUnion and Equifax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransUnion position performs unexpectedly, Equifax 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 Equifax will offset losses from the drop in Equifax's long position.| TransUnion vs. Exponent | TransUnion vs. Verisk Analytics | TransUnion vs. FTI Consulting | TransUnion vs. Forrester Research |
| Equifax vs. Verisk Analytics | Equifax vs. Exponent | Equifax vs. FTI Consulting | Equifax vs. Franklin Covey |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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