Correlation Between TransAct Technologies and Bassett Furniture
Can any of the company-specific risk be diversified away by investing in both TransAct Technologies and Bassett Furniture 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 TransAct Technologies and Bassett Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransAct Technologies Incorporated and Bassett Furniture Industries, you can compare the effects of market volatilities on TransAct Technologies and Bassett Furniture 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 TransAct Technologies with a short position of Bassett Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAct Technologies and Bassett Furniture.
Diversification Opportunities for TransAct Technologies and Bassett Furniture
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TransAct and Bassett is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding TransAct Technologies Incorpor and Bassett Furniture Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassett Furniture and TransAct Technologies 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 TransAct Technologies Incorporated are associated (or correlated) with Bassett Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bassett Furniture has no effect on the direction of TransAct Technologies i.e., TransAct Technologies and Bassett Furniture go up and down completely randomly.
Pair Corralation between TransAct Technologies and Bassett Furniture
Given the investment horizon of 90 days TransAct Technologies Incorporated is expected to under-perform the Bassett Furniture. In addition to that, TransAct Technologies is 1.67 times more volatile than Bassett Furniture Industries. It trades about -0.02 of its total potential returns per unit of risk. Bassett Furniture Industries is currently generating about 0.0 per unit of volatility. If you would invest 1,655 in Bassett Furniture Industries on December 5, 2024 and sell it today you would lose (117.00) from holding Bassett Furniture Industries or give up 7.07% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
TransAct Technologies Incorpor vs. Bassett Furniture Industries
Performance |
Timeline |
TransAct Technologies |
Bassett Furniture |
TransAct Technologies and Bassett Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TransAct Technologies and Bassett Furniture
The main advantage of trading using opposite TransAct Technologies and Bassett Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransAct Technologies position performs unexpectedly, Bassett Furniture 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 Bassett Furniture will offset losses from the drop in Bassett Furniture's long position.TransAct Technologies vs. AstroNova | TransAct Technologies vs. Key Tronic | TransAct Technologies vs. FARO Technologies | TransAct Technologies vs. Hooker Furniture |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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