Correlation Between TransAct Technologies and Immersion

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

Diversification Opportunities for TransAct Technologies and Immersion

-0.26

Correlation Coefficient

TransAct Technologies  Immersion

Very good diversification

The 3 months correlation between TransAct and Immersion is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding TransAct Technologies Incorpor and Immersion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immersion 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 Immersion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immersion has no effect on the direction of TransAct Technologies i.e., TransAct Technologies and Immersion go up and down completely randomly.

Pair Corralation between TransAct Technologies and Immersion

Given the investment horizon of 90 days TransAct Technologies Incorporated is expected to under-perform the Immersion. But the stock apears to be less risky and, when comparing its historical volatility, TransAct Technologies Incorporated is 1.1 times less risky than Immersion. The stock trades about -0.09 of its potential returns per unit of risk. The Immersion is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  862.00  in Immersion on September 23, 2024 and sell it today you would earn a total of  47.00  from holding Immersion or generate 5.45% return on investment over 90 days.

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

TransAct Technologies Incorpor  vs.  Immersion

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 uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Immersion

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Immersion are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Immersion may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TransAct Technologies and Immersion

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

The idea behind TransAct Technologies Incorporated and Immersion 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.