Correlation Between Exchange Traded and TransAKT

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

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

Diversification Opportunities for Exchange Traded and TransAKT

0.51

Correlation Coefficient

Exchange Traded  TransAKT

Very weak diversification

The 3 months correlation between Exchange and TransAKT is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and TransAKT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAKT and Exchange Traded 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 Exchange Traded Concepts 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 Exchange Traded i.e., Exchange Traded and TransAKT go up and down completely randomly.

Pair Corralation between Exchange Traded and TransAKT

If you would invest  1.01  in TransAKT on September 1, 2024 and sell it today you would earn a total of  1.76  from holding TransAKT or generate 174.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Exchange Traded Concepts  vs.  TransAKT

Exchange Traded Concepts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exchange Traded Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Exchange Traded is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

TransAKT

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TransAKT are ranked lower than 9 (%) 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 Exchange Traded and TransAKT

The main advantage of trading using opposite Exchange Traded and TransAKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Traded 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 Exchange Traded Concepts 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.