Correlation Between Texas Instruments and Western Union

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

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

Diversification Opportunities for Texas Instruments and Western Union

-0.68

Correlation Coefficient

Texas Instruments  Western Union

Excellent diversification

The 3 months correlation between Texas and Western is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Texas Instruments Incorporated and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union and Texas Instruments 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 Texas Instruments Incorporated are associated (or correlated) with Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of Texas Instruments i.e., Texas Instruments and Western Union go up and down completely randomly.

Pair Corralation between Texas Instruments and Western Union

Considering the 90-day investment horizon Texas Instruments Incorporated is expected to generate 1.4 times more return on investment than Western Union. However, Texas Instruments is 1.4 times more volatile than Western Union Co. It trades about 0.08 of its potential returns per unit of risk. Western Union Co is currently generating about -0.12 per unit of risk. If you would invest  16,361  in Texas Instruments Incorporated on May 7, 2025 and sell it today you would earn a total of  1,912  from holding Texas Instruments Incorporated or generate 11.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Texas Instruments Incorporated  vs.  Western Union Co

Texas Instruments

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Texas Instruments Incorporated are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Texas Instruments displayed solid returns over the last few months and may actually be approaching a breakup point.

Western Union

Risk-Adjusted Performance

Very Weak

Over the last 90 days Western Union Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Texas Instruments and Western Union

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

The idea behind Texas Instruments Incorporated and Western Union Co 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.