Correlation Between Transcat and Applied Industrial
Can any of the company-specific risk be diversified away by investing in both Transcat and Applied Industrial 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 Transcat and Applied Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcat and Applied Industrial Technologies, you can compare the effects of market volatilities on Transcat and Applied Industrial 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 Transcat with a short position of Applied Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcat and Applied Industrial.
Diversification Opportunities for Transcat and Applied Industrial
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Transcat and Applied is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Transcat and Applied Industrial Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Industrial and Transcat 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 Transcat are associated (or correlated) with Applied Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Industrial has no effect on the direction of Transcat i.e., Transcat and Applied Industrial go up and down completely randomly.
Pair Corralation between Transcat and Applied Industrial
Given the investment horizon of 90 days Transcat is expected to under-perform the Applied Industrial. In addition to that, Transcat is 1.39 times more volatile than Applied Industrial Technologies. It trades about -0.06 of its total potential returns per unit of risk. Applied Industrial Technologies is currently generating about 0.21 per unit of volatility. If you would invest 20,704 in Applied Industrial Technologies on August 26, 2024 and sell it today you would earn a total of 7,007 from holding Applied Industrial Technologies or generate 33.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcat vs. Applied Industrial Technologie
Performance |
| Timeline |
| Transcat |
| Applied Industrial |
Transcat and Applied Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcat and Applied Industrial
The main advantage of trading using opposite Transcat and Applied Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcat position performs unexpectedly, Applied Industrial 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 Applied Industrial will offset losses from the drop in Applied Industrial's long position.| Transcat vs. BlueLinx Holdings | Transcat vs. SiteOne Landscape Supply | Transcat vs. DXP Enterprises | Transcat vs. Core Main |
| Applied Industrial vs. Global Industrial Co | Applied Industrial vs. BlueLinx Holdings | Applied Industrial vs. WESCO International | Applied Industrial vs. MSC Industrial Direct |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |