Correlation Between WNS Holdings and Unisys

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

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

Diversification Opportunities for WNS Holdings and Unisys

0.5

Correlation Coefficient

WNS Holdings  Unisys

Very weak diversification

The 3 months correlation between WNS and Unisys is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding WNS Holdings and Unisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unisys and WNS Holdings 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 WNS Holdings are associated (or correlated) with Unisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unisys has no effect on the direction of WNS Holdings i.e., WNS Holdings and Unisys go up and down completely randomly.

Pair Corralation between WNS Holdings and Unisys

Considering the 90-day investment horizon WNS Holdings is expected to under-perform the Unisys. But the stock apears to be less risky and, when comparing its historical volatility, WNS Holdings is 2.36 times less risky than Unisys. The stock trades about -0.04 of its potential returns per unit of risk. The Unisys is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  414.00  in Unisys on September 28, 2024 and sell it today you would earn a total of  228.00  from holding Unisys or generate 55.07% return on investment over 90 days.

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

WNS Holdings  vs.  Unisys

WNS Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WNS Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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.

Unisys

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Unisys are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Unisys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WNS Holdings and Unisys

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

The idea behind WNS Holdings and Unisys 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.