Correlation Between Conduent and Unisys

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

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

Diversification Opportunities for Conduent and Unisys

0.21

Correlation Coefficient

Conduent  Unisys

Modest diversification

The 3 months correlation between Conduent and Unisys is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Conduent and Unisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unisys and Conduent 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 Conduent 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 Conduent i.e., Conduent and Unisys go up and down completely randomly.

Pair Corralation between Conduent and Unisys

Given the investment horizon of 90 days Conduent is expected to generate 1.11 times more return on investment than Unisys. However, Conduent is 1.11 times more volatile than Unisys. It trades about 0.13 of its potential returns per unit of risk. Unisys is currently generating about 0.04 per unit of risk. If you would invest  320.00  in Conduent on February 13, 2024 and sell it today you would earn a total of  50.00  from holding Conduent or generate 15.63% return on investment over 90 days.

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

Conduent  vs.  Unisys

Conduent

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Conduent are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental indicators, Conduent may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Unisys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unisys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Conduent and Unisys

The main advantage of trading using opposite Conduent and Unisys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conduent 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 Conduent 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.