Correlation Between TransAKT and Dow Jones
Can any of the company-specific risk be diversified away by investing in both TransAKT and Dow Jones 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 TransAKT and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransAKT and Dow Jones Industrial, you can compare the effects of market volatilities on TransAKT and Dow Jones 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 TransAKT with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAKT and Dow Jones.
Diversification Opportunities for TransAKT and Dow Jones
Weak diversification
The 3 months correlation between TransAKT and Dow is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding TransAKT and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and TransAKT 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 TransAKT are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of TransAKT i.e., TransAKT and Dow Jones go up and down completely randomly.
Pair Corralation between TransAKT and Dow Jones
Given the investment horizon of 90 days TransAKT is expected to generate 106.37 times more return on investment than Dow Jones. However, TransAKT is 106.37 times more volatile than Dow Jones Industrial. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 1.90 in TransAKT on August 26, 2024 and sell it today you would earn a total of 0.10 from holding TransAKT or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TransAKT vs. Dow Jones Industrial
Performance |
| Timeline |
TransAKT and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
TransAKT
Pair trading matchups for TransAKT
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with TransAKT and Dow Jones
The main advantage of trading using opposite TransAKT and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransAKT position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| TransAKT vs. Element Solutions | TransAKT vs. Orion Engineered Carbons | TransAKT vs. Minerals Technologies | TransAKT vs. Ingevity Corp |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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