Correlation Between Crown Proptech and TransAKT

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

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

Diversification Opportunities for Crown Proptech and TransAKT

0.4

Correlation Coefficient

Crown Proptech  TransAKT

Very weak diversification

The 3 months correlation between Crown and TransAKT is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Crown Proptech Acquisitions and TransAKT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAKT and Crown Proptech 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 Crown Proptech Acquisitions 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 Crown Proptech i.e., Crown Proptech and TransAKT go up and down completely randomly.

Pair Corralation between Crown Proptech and TransAKT

Assuming the 90 days horizon Crown Proptech Acquisitions is expected to generate 2.78 times more return on investment than TransAKT. However, Crown Proptech is 2.78 times more volatile than TransAKT. It trades about 0.25 of its potential returns per unit of risk. TransAKT is currently generating about 0.11 per unit of risk. If you would invest  7.50  in Crown Proptech Acquisitions on October 11, 2024 and sell it today you would lose (5.40) from holding Crown Proptech Acquisitions or give up 72.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	7.46%
Values	Daily Returns

Crown Proptech Acquisitions  vs.  TransAKT

Crown Proptech Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Proptech Acquisitions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward-looking signals, Crown Proptech is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

TransAKT

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TransAKT are ranked lower than 12 (%) 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 Crown Proptech and TransAKT

The main advantage of trading using opposite Crown Proptech and TransAKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Proptech 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 Crown Proptech Acquisitions 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 Stocks Directory module to find actively traded stocks across global markets.