Correlation Between TransAKT and Concord Acquisition

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

By analyzing existing cross correlation between TransAKT and Concord Acquisition Corp, you can compare the effects of market volatilities on TransAKT and Concord Acquisition 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 TransAKT with a short position of Concord Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAKT and Concord Acquisition.

Diversification Opportunities for TransAKT and Concord Acquisition

0.18

Correlation Coefficient

TransAKT  Concord Acquisition

Average diversification

The 3 months correlation between TransAKT and Concord is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding TransAKT and Concord Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Acquisition Corp and TransAKT 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 TransAKT are associated (or correlated) with Concord Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Acquisition Corp has no effect on the direction of TransAKT i.e., TransAKT and Concord Acquisition go up and down completely randomly.

Pair Corralation between TransAKT and Concord Acquisition

Given the investment horizon of 90 days TransAKT is expected to generate 964.15 times more return on investment than Concord Acquisition. However, TransAKT is 964.15 times more volatile than Concord Acquisition Corp. It trades about 0.11 of its potential returns per unit of risk. Concord Acquisition Corp is currently generating about 0.13 per unit of risk. If you would invest  1.30  in TransAKT on September 17, 2024 and sell it today you would earn a total of  8.70  from holding TransAKT or generate 669.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	28.77%
Values	Daily Returns

TransAKT  vs.  Concord Acquisition Corp

TransAKT

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TransAKT are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent forward-looking signals, TransAKT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Concord Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concord Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Concord Acquisition is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TransAKT and Concord Acquisition

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

The idea behind TransAKT and Concord Acquisition Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..