Correlation Between TransUnion and CBIZ

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

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

Diversification Opportunities for TransUnion and CBIZ

-0.37

Correlation Coefficient

TransUnion  CBIZ

Very good diversification

The 3 months correlation between TransUnion and CBIZ is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding TransUnion and CBIZ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBIZ Inc 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 CBIZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBIZ Inc has no effect on the direction of TransUnion i.e., TransUnion and CBIZ go up and down completely randomly.

Pair Corralation between TransUnion and CBIZ

Considering the 90-day investment horizon TransUnion is expected to generate 4.7 times less return on investment than CBIZ. But when comparing it to its historical volatility, TransUnion is 1.05 times less risky than CBIZ. It trades about 0.04 of its potential returns per unit of risk. CBIZ Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  6,451  in CBIZ Inc on September 10, 2024 and sell it today you would earn a total of  1,439  from holding CBIZ Inc or generate 22.31% return on investment over 90 days.

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

TransUnion  vs.  CBIZ Inc

TransUnion

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TransUnion are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, TransUnion is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

CBIZ Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CBIZ Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, CBIZ showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TransUnion and CBIZ

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

The idea behind TransUnion and CBIZ Inc 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.