Correlation Between Driven Brands and TransUnion

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

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

Diversification Opportunities for Driven Brands and TransUnion

0.61

Correlation Coefficient

Driven Brands  TransUnion

Poor diversification

The 3 months correlation between Driven and TransUnion is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and TransUnion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransUnion and Driven Brands 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 Driven Brands Holdings are associated (or correlated) with TransUnion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransUnion has no effect on the direction of Driven Brands i.e., Driven Brands and TransUnion go up and down completely randomly.

Pair Corralation between Driven Brands and TransUnion

Given the investment horizon of 90 days Driven Brands is expected to generate 2.15 times less return on investment than TransUnion. But when comparing it to its historical volatility, Driven Brands Holdings is 1.03 times less risky than TransUnion. It trades about 0.05 of its potential returns per unit of risk. TransUnion is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  8,235  in TransUnion on April 24, 2025 and sell it today you would earn a total of  983.00  from holding TransUnion or generate 11.94% return on investment over 90 days.

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

Driven Brands Holdings  vs.  TransUnion

Driven Brands Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Driven Brands Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Driven Brands is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

TransUnion

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TransUnion are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, TransUnion unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Driven Brands and TransUnion

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

The idea behind Driven Brands Holdings and TransUnion 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.