Correlation Between Wolters Kluwer and Shell PLC

Can any of the company-specific risk be diversified away by investing in both Wolters Kluwer and Shell PLC 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 Shell PLC 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 Shell PLC, you can compare the effects of market volatilities on Wolters Kluwer and Shell PLC 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 Shell PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wolters Kluwer and Shell PLC.

Diversification Opportunities for Wolters Kluwer and Shell PLC

-0.57

Correlation Coefficient

Wolters Kluwer  Shell PLC

Excellent diversification

The 3 months correlation between Wolters and Shell is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Wolters Kluwer NV and Shell PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell PLC 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 Shell PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell PLC has no effect on the direction of Wolters Kluwer i.e., Wolters Kluwer and Shell PLC go up and down completely randomly.

Pair Corralation between Wolters Kluwer and Shell PLC

Assuming the 90 days trading horizon Wolters Kluwer NV is expected to under-perform the Shell PLC. But the stock apears to be less risky and, when comparing its historical volatility, Wolters Kluwer NV is 1.09 times less risky than Shell PLC. The stock trades about -0.09 of its potential returns per unit of risk. The Shell PLC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,824  in Shell PLC on April 21, 2025 and sell it today you would earn a total of  216.00  from holding Shell PLC or generate 7.65% return on investment over 90 days.

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

Wolters Kluwer NV  vs.  Shell PLC

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 comparatively stable essential indicators, Wolters Kluwer is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Shell PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shell PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Shell PLC may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Wolters Kluwer and Shell PLC

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

The idea behind Wolters Kluwer NV and Shell PLC 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.