Correlation Between TransAct Technologies and Stratasys

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

Diversification Opportunities for TransAct Technologies and Stratasys

-0.56

Correlation Coefficient

TransAct Technologies  Stratasys

Excellent diversification

The 3 months correlation between TransAct and Stratasys is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding TransAct Technologies Incorpor and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys 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 Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of TransAct Technologies i.e., TransAct Technologies and Stratasys go up and down completely randomly.

Pair Corralation between TransAct Technologies and Stratasys

Given the investment horizon of 90 days TransAct Technologies Incorporated is expected to under-perform the Stratasys. In addition to that, TransAct Technologies is 1.05 times more volatile than Stratasys. It trades about -0.05 of its total potential returns per unit of risk. Stratasys is currently generating about -0.03 per unit of volatility. If you would invest  1,313  in Stratasys on October 2, 2024 and sell it today you would lose (425.00) from holding Stratasys or give up 32.37% of portfolio value over 90 days.

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

TransAct Technologies Incorpor  vs.  Stratasys

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 latest inconsistent 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.

Stratasys

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Stratasys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TransAct Technologies and Stratasys

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

The idea behind TransAct Technologies Incorporated and Stratasys 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.