Correlation Between Wolters Kluwer and WOLTERS KLUWER

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

Diversification Opportunities for Wolters Kluwer and WOLTERS KLUWER

0.98

Correlation Coefficient

Wolters Kluwer  WOLTERS KLUWER

Almost no diversification

The 3 months correlation between Wolters and WOLTERS is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Wolters Kluwer NV and WOLTERS KLUWER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOLTERS KLUWER ADR 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 WOLTERS KLUWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOLTERS KLUWER ADR has no effect on the direction of Wolters Kluwer i.e., Wolters Kluwer and WOLTERS KLUWER go up and down completely randomly.

Pair Corralation between Wolters Kluwer and WOLTERS KLUWER

Assuming the 90 days trading horizon Wolters Kluwer NV is expected to under-perform the WOLTERS KLUWER. But the stock apears to be less risky and, when comparing its historical volatility, Wolters Kluwer NV is 1.2 times less risky than WOLTERS KLUWER. The stock trades about -0.12 of its potential returns per unit of risk. The WOLTERS KLUWER ADR is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  14,000  in WOLTERS KLUWER ADR on April 22, 2025 and sell it today you would lose (100.00) from holding WOLTERS KLUWER ADR or give up 0.71% of portfolio value over 90 days.

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

Wolters Kluwer NV  vs.  WOLTERS KLUWER ADR

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. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

WOLTERS KLUWER ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days WOLTERS KLUWER ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WOLTERS KLUWER is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Wolters Kluwer and WOLTERS KLUWER

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

The idea behind Wolters Kluwer NV and WOLTERS KLUWER ADR 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.