Correlation Between TransAct Technologies and Key Tronic
Can any of the company-specific risk be diversified away by investing in both TransAct Technologies and Key Tronic 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 TransAct Technologies and Key Tronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransAct Technologies Incorporated and Key Tronic, you can compare the effects of market volatilities on TransAct Technologies and Key Tronic 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 TransAct Technologies with a short position of Key Tronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAct Technologies and Key Tronic.
Diversification Opportunities for TransAct Technologies and Key Tronic
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TransAct and Key is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding TransAct Technologies Incorpor and Key Tronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Key Tronic and TransAct Technologies 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 TransAct Technologies Incorporated are associated (or correlated) with Key Tronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Key Tronic has no effect on the direction of TransAct Technologies i.e., TransAct Technologies and Key Tronic go up and down completely randomly.
Pair Corralation between TransAct Technologies and Key Tronic
Given the investment horizon of 90 days TransAct Technologies Incorporated is expected to generate 1.26 times more return on investment than Key Tronic. However, TransAct Technologies is 1.26 times more volatile than Key Tronic. It trades about -0.01 of its potential returns per unit of risk. Key Tronic is currently generating about -0.07 per unit of risk. If you would invest 550.00 in TransAct Technologies Incorporated on January 15, 2025 and sell it today you would lose (184.00) from holding TransAct Technologies Incorporated or give up 33.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TransAct Technologies Incorpor vs. Key Tronic
Performance |
| Timeline |
| TransAct Technologies |
| Key Tronic |
TransAct Technologies and Key Tronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TransAct Technologies and Key Tronic
The main advantage of trading using opposite TransAct Technologies and Key Tronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransAct Technologies position performs unexpectedly, Key Tronic 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 Key Tronic will offset losses from the drop in Key Tronic's long position.| TransAct Technologies vs. AstroNova | TransAct Technologies vs. Key Tronic | TransAct Technologies vs. FARO Technologies | TransAct Technologies vs. Hooker Furniture |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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