Correlation Between Global Blockchain and TransAKT

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

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

Diversification Opportunities for Global Blockchain and TransAKT

-0.43

Correlation Coefficient

Global Blockchain  TransAKT

Very good diversification

The 3 months correlation between Global and TransAKT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Global Blockchain Acquisition and TransAKT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAKT and Global Blockchain 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 Global Blockchain Acquisition 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 Global Blockchain i.e., Global Blockchain and TransAKT go up and down completely randomly.

Pair Corralation between Global Blockchain and TransAKT

Given the investment horizon of 90 days Global Blockchain is expected to generate 807.41 times less return on investment than TransAKT. But when comparing it to its historical volatility, Global Blockchain Acquisition is 225.74 times less risky than TransAKT. It trades about 0.04 of its potential returns per unit of risk. TransAKT is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2.77  in TransAKT on December 1, 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 Against
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Global Blockchain Acquisition  vs.  TransAKT

Global Blockchain

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blockchain Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Global Blockchain is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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 Global Blockchain and TransAKT

The main advantage of trading using opposite Global Blockchain and TransAKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Blockchain 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 Global Blockchain Acquisition 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.