Correlation Between Nano Dimension and TransAct Technologies

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

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

Diversification Opportunities for Nano Dimension and TransAct Technologies

0.33

Correlation Coefficient

Nano Dimension  TransAct Technologies

Weak diversification

The 3 months correlation between Nano and TransAct is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nano Dimension and TransAct Technologies Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAct Technologies and Nano Dimension 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 Nano Dimension are associated (or correlated) with TransAct Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAct Technologies has no effect on the direction of Nano Dimension i.e., Nano Dimension and TransAct Technologies go up and down completely randomly.

Pair Corralation between Nano Dimension and TransAct Technologies

Given the investment horizon of 90 days Nano Dimension is expected to generate 1.13 times more return on investment than TransAct Technologies. However, Nano Dimension is 1.13 times more volatile than TransAct Technologies Incorporated. It trades about 0.05 of its potential returns per unit of risk. TransAct Technologies Incorporated is currently generating about 0.03 per unit of risk. If you would invest  219.00  in Nano Dimension on September 23, 2024 and sell it today you would earn a total of  30.00  from holding Nano Dimension or generate 13.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nano Dimension  vs.  TransAct Technologies Incorpor

Nano Dimension

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Dimension are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Nano Dimension displayed solid returns over the last few months and may actually be approaching a breakup point.

TransAct Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TransAct Technologies Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Nano Dimension and TransAct Technologies

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

The idea behind Nano Dimension and TransAct Technologies Incorporated 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.