Correlation Between TransAct Technologies and Rigetti Computing

Can any of the company-specific risk be diversified away by investing in both TransAct Technologies and Rigetti Computing 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 Rigetti Computing 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 Rigetti Computing, you can compare the effects of market volatilities on TransAct Technologies and Rigetti Computing 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 Rigetti Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAct Technologies and Rigetti Computing.

Diversification Opportunities for TransAct Technologies and Rigetti Computing

0.35

Correlation Coefficient

TransAct Technologies  Rigetti Computing

Weak diversification

The 3 months correlation between TransAct and Rigetti is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding TransAct Technologies Incorpor and Rigetti Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigetti Computing 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 Rigetti Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigetti Computing has no effect on the direction of TransAct Technologies i.e., TransAct Technologies and Rigetti Computing go up and down completely randomly.

Pair Corralation between TransAct Technologies and Rigetti Computing

Given the investment horizon of 90 days TransAct Technologies Incorporated is expected to generate 0.23 times more return on investment than Rigetti Computing. However, TransAct Technologies Incorporated is 4.42 times less risky than Rigetti Computing. It trades about -0.39 of its potential returns per unit of risk. Rigetti Computing is currently generating about -0.25 per unit of risk. If you would invest  448.00  in TransAct Technologies Incorporated on December 1, 2024 and sell it today you would lose (51.00) from holding TransAct Technologies Incorporated or give up 11.38% of portfolio value over 90 days.

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

TransAct Technologies Incorpor  vs.  Rigetti Computing

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 comparatively stable fundamental indicators, TransAct Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Rigetti Computing

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rigetti Computing are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Rigetti Computing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TransAct Technologies and Rigetti Computing

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

The idea behind TransAct Technologies Incorporated and Rigetti Computing 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.