Correlation Between TransUnion and Aerius International

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

By analyzing existing cross correlation between TransUnion and Aerius International, you can compare the effects of market volatilities on TransUnion and Aerius International 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 Aerius International. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransUnion and Aerius International.

Diversification Opportunities for TransUnion and Aerius International

-0.64

Correlation Coefficient

TransUnion  Aerius International

Excellent diversification

The 3 months correlation between TransUnion and Aerius is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding TransUnion and Aerius International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerius International 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 Aerius International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerius International has no effect on the direction of TransUnion i.e., TransUnion and Aerius International go up and down completely randomly.

Pair Corralation between TransUnion and Aerius International

Considering the 90-day investment horizon TransUnion is expected to under-perform the Aerius International. But the stock apears to be less risky and, when comparing its historical volatility, TransUnion is 3.2 times less risky than Aerius International. The stock trades about -0.07 of its potential returns per unit of risk. The Aerius International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.17  in Aerius International on December 29, 2024 and sell it today you would earn a total of  0.01  from holding Aerius International or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

TransUnion  vs.  Aerius International

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.

Aerius International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aerius International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Aerius International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TransUnion and Aerius International

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

The idea behind TransUnion and Aerius International 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.