Correlation Between Eshallgo and TransAct Technologies
Can any of the company-specific risk be diversified away by investing in both Eshallgo and TransAct Technologies 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 Eshallgo and TransAct Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eshallgo Class A and TransAct Technologies Incorporated, you can compare the effects of market volatilities on Eshallgo and TransAct Technologies 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 Eshallgo with a short position of TransAct Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eshallgo and TransAct Technologies.
Diversification Opportunities for Eshallgo and TransAct Technologies
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eshallgo and TransAct is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eshallgo Class A and TransAct Technologies Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAct Technologies and Eshallgo 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 Eshallgo Class A are associated (or correlated) with TransAct Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAct Technologies has no effect on the direction of Eshallgo i.e., Eshallgo and TransAct Technologies go up and down completely randomly.
Pair Corralation between Eshallgo and TransAct Technologies
Given the investment horizon of 90 days Eshallgo Class A is expected to generate 3.78 times more return on investment than TransAct Technologies. However, Eshallgo is 3.78 times more volatile than TransAct Technologies Incorporated. It trades about 0.31 of its potential returns per unit of risk. TransAct Technologies Incorporated is currently generating about 0.04 per unit of risk. If you would invest 236.00 in Eshallgo Class A on August 27, 2024 and sell it today you would earn a total of 139.00 from holding Eshallgo Class A or generate 58.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eshallgo Class A vs. TransAct Technologies Incorpor
Performance |
| Timeline |
| Eshallgo Class A |
| TransAct Technologies |
Eshallgo and TransAct Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eshallgo and TransAct Technologies
The main advantage of trading using opposite Eshallgo and TransAct Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eshallgo position performs unexpectedly, TransAct Technologies 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 TransAct Technologies will offset losses from the drop in TransAct Technologies' long position.| Eshallgo vs. Lululemon Athletica | Eshallgo vs. Asbury Automotive Group | Eshallgo vs. SunLink Health Systems | Eshallgo vs. Simon Property Group |
| TransAct Technologies vs. AstroNova | TransAct Technologies vs. Key Tronic | TransAct Technologies vs. FARO Technologies | TransAct Technologies vs. Hooker Furniture |
Check out your portfolio center.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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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