Correlation Between TransAKT and Tanke Biosciences
Can any of the company-specific risk be diversified away by investing in both TransAKT and Tanke Biosciences 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 Tanke Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransAKT and Tanke Biosciences, you can compare the effects of market volatilities on TransAKT and Tanke Biosciences 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 Tanke Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAKT and Tanke Biosciences.
Diversification Opportunities for TransAKT and Tanke Biosciences
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TransAKT and Tanke is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding TransAKT and Tanke Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanke Biosciences 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 Tanke Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanke Biosciences has no effect on the direction of TransAKT i.e., TransAKT and Tanke Biosciences go up and down completely randomly.
Pair Corralation between TransAKT and Tanke Biosciences
Given the investment horizon of 90 days TransAKT is expected to generate 3.14 times more return on investment than Tanke Biosciences. However, TransAKT is 3.14 times more volatile than Tanke Biosciences. It trades about 0.1 of its potential returns per unit of risk. Tanke Biosciences is currently generating about 0.05 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TransAKT vs. Tanke Biosciences
Performance |
| Timeline |
| TransAKT |
| Tanke Biosciences |
TransAKT and Tanke Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TransAKT and Tanke Biosciences
The main advantage of trading using opposite TransAKT and Tanke Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransAKT position performs unexpectedly, Tanke Biosciences 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 Tanke Biosciences will offset losses from the drop in Tanke Biosciences' long position.| TransAKT vs. Element Solutions | TransAKT vs. Orion Engineered Carbons | TransAKT vs. Minerals Technologies | TransAKT vs. Ingevity Corp |
| Tanke Biosciences vs. Absolute Health and | Tanke Biosciences vs. China Health Management | Tanke Biosciences vs. Embrace Change Acquisition | Tanke Biosciences 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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