Correlation Between Blockchain Industries and TransAKT

Can any of the company-specific risk be diversified away by investing in both Blockchain Industries and TransAKT 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 Blockchain Industries and TransAKT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blockchain Industries and TransAKT, you can compare the effects of market volatilities on Blockchain Industries and TransAKT 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 Blockchain Industries with a short position of TransAKT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blockchain Industries and TransAKT.

Diversification Opportunities for Blockchain Industries and TransAKT

0.65

Correlation Coefficient

Blockchain Industries  TransAKT

Poor diversification

The 3 months correlation between Blockchain and TransAKT is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Blockchain Industries and TransAKT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAKT and Blockchain Industries 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 Blockchain Industries are associated (or correlated) with TransAKT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAKT has no effect on the direction of Blockchain Industries i.e., Blockchain Industries and TransAKT go up and down completely randomly.

Pair Corralation between Blockchain Industries and TransAKT

Given the investment horizon of 90 days Blockchain Industries is expected to under-perform the TransAKT. But the pink sheet apears to be less risky and, when comparing its historical volatility, Blockchain Industries is 14.51 times less risky than TransAKT. The pink sheet trades about -0.05 of its potential returns per unit of risk. The TransAKT is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2.77  in TransAKT on December 5, 2024 and sell it today you would lose (0.87) from holding TransAKT or give up 31.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.72%
Values	Daily Returns

Blockchain Industries  vs.  TransAKT

Blockchain Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blockchain Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

TransAKT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TransAKT are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent forward-looking signals, TransAKT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blockchain Industries and TransAKT

The main advantage of trading using opposite Blockchain Industries and TransAKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blockchain Industries position performs unexpectedly, TransAKT 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 TransAKT will offset losses from the drop in TransAKT's long position.

The idea behind Blockchain Industries and TransAKT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.