Correlation Between Wolters Kluwer and Unifirst

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

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

Diversification Opportunities for Wolters Kluwer and Unifirst

0.48

Correlation Coefficient

Wolters Kluwer  Unifirst

Very weak diversification

The 3 months correlation between Wolters and Unifirst is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wolters Kluwer NV and Unifirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifirst and Wolters Kluwer 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 Wolters Kluwer NV are associated (or correlated) with Unifirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unifirst has no effect on the direction of Wolters Kluwer i.e., Wolters Kluwer and Unifirst go up and down completely randomly.

Pair Corralation between Wolters Kluwer and Unifirst

Assuming the 90 days horizon Wolters Kluwer NV is expected to under-perform the Unifirst. But the pink sheet apears to be less risky and, when comparing its historical volatility, Wolters Kluwer NV is 1.86 times less risky than Unifirst. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Unifirst is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  17,250  in Unifirst on December 27, 2024 and sell it today you would lose (163.00) from holding Unifirst or give up 0.94% of portfolio value over 90 days.

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

Wolters Kluwer NV  vs.  Unifirst

Wolters Kluwer NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wolters Kluwer NV 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 strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Unifirst

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unifirst are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Unifirst is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Wolters Kluwer and Unifirst

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

The idea behind Wolters Kluwer NV and Unifirst 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.