Correlation Between Western Union and Acuren

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

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

Diversification Opportunities for Western Union and Acuren

0.48

Correlation Coefficient

Western Union  Acuren

Very weak diversification

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

Pair Corralation between Western Union and Acuren

Allowing for the 90-day total investment horizon Western Union is expected to generate 1.97 times less return on investment than Acuren. But when comparing it to its historical volatility, Western Union Co is 1.29 times less risky than Acuren. It trades about 0.03 of its potential returns per unit of risk. Acuren is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,250  in Acuren on December 28, 2024 and sell it today you would earn a total of  48.00  from holding Acuren or generate 3.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	68.33%
Values	Daily Returns

Western Union Co  vs.  Acuren

Western Union

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Western Union Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Western Union is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Acuren

Risk-Adjusted Performance

Insignificant

Over the last 90 days Acuren has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unfluctuating basic indicators, Acuren may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Western Union and Acuren

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

The idea behind Western Union Co and Acuren 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.