Correlation Between Global X and TransAct Technologies

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

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

Diversification Opportunities for Global X and TransAct Technologies

0.0

Correlation Coefficient

Global X  TransAct Technologies

Pay attention - limited upside

The 3 months correlation between Global and TransAct is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global X PropTech and TransAct Technologies Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAct Technologies and Global X 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 X PropTech 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 Global X i.e., Global X and TransAct Technologies go up and down completely randomly.

Pair Corralation between Global X and TransAct Technologies

Given the investment horizon of 90 days Global X PropTech is expected to generate 0.61 times more return on investment than TransAct Technologies. However, Global X PropTech is 1.63 times less risky than TransAct Technologies. It trades about 0.04 of its potential returns per unit of risk. TransAct Technologies Incorporated is currently generating about -0.05 per unit of risk. If you would invest  3,325  in Global X PropTech on December 29, 2024 and sell it today you would earn a total of  93.00  from holding Global X PropTech or generate 2.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Global X PropTech  vs.  TransAct Technologies Incorpor

Global X PropTech

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global X PropTech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Global X is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

TransAct Technologies

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Global X and TransAct Technologies

The main advantage of trading using opposite Global X and TransAct Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 Global X PropTech 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.