Correlation Between TransAKT and New Generation
Can any of the company-specific risk be diversified away by investing in both TransAKT and New Generation 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 New Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransAKT and New Generation Consumer, you can compare the effects of market volatilities on TransAKT and New Generation 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 New Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAKT and New Generation.
Diversification Opportunities for TransAKT and New Generation
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TransAKT and New is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding TransAKT and New Generation Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Generation Consumer 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 New Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Generation Consumer has no effect on the direction of TransAKT i.e., TransAKT and New Generation go up and down completely randomly.
Pair Corralation between TransAKT and New Generation
Given the investment horizon of 90 days TransAKT is expected to generate 5.9 times more return on investment than New Generation. However, TransAKT is 5.9 times more volatile than New Generation Consumer. It trades about 0.1 of its potential returns per unit of risk. New Generation Consumer is currently generating about 0.03 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TransAKT vs. New Generation Consumer
Performance |
| Timeline |
| TransAKT |
| New Generation Consumer |
TransAKT and New Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TransAKT and New Generation
The main advantage of trading using opposite TransAKT and New Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransAKT position performs unexpectedly, New Generation 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 New Generation will offset losses from the drop in New Generation's long position.| TransAKT vs. Element Solutions | TransAKT vs. Orion Engineered Carbons | TransAKT vs. Minerals Technologies | TransAKT vs. Ingevity Corp |
| New Generation vs. Absolute Health and | New Generation vs. China Health Management | New Generation vs. Embrace Change Acquisition | New Generation vs. TransAKT |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |