Correlation Between Resources Connection and TransUnion

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

By analyzing existing cross correlation between Resources Connection and TransUnion, you can compare the effects of market volatilities on Resources Connection 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 Resources Connection with a short position of TransUnion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resources Connection and TransUnion.

Diversification Opportunities for Resources Connection and TransUnion

0.72

Correlation Coefficient

Resources Connection  TransUnion

Poor diversification

The 3 months correlation between Resources and TransUnion is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Resources Connection and TransUnion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransUnion and Resources Connection 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 Resources Connection 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 Resources Connection i.e., Resources Connection and TransUnion go up and down completely randomly.

Pair Corralation between Resources Connection and TransUnion

Considering the 90-day investment horizon Resources Connection is expected to under-perform the TransUnion. But the stock apears to be less risky and, when comparing its historical volatility, Resources Connection is 1.34 times less risky than TransUnion. The stock trades about -0.21 of its potential returns per unit of risk. The TransUnion is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  9,264  in TransUnion on December 30, 2024 and sell it today you would lose (1,039) from holding TransUnion or give up 11.22% of portfolio value over 90 days.

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

Resources Connection  vs.  TransUnion

Resources Connection

Risk-Adjusted Performance

Very Weak

Over the last 90 days Resources Connection has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

TransUnion

Risk-Adjusted Performance

Very Weak

Over the last 90 days TransUnion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Resources Connection and TransUnion

The main advantage of trading using opposite Resources Connection and TransUnion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resources Connection 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 Resources Connection 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.