Correlation Between TransAct Technologies and Nano Dimension

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

Diversification Opportunities for TransAct Technologies and Nano Dimension

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between TransAct and Nano is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding TransAct Technologies Incorpor and Nano Dimension in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Dimension 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 Nano Dimension. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Dimension has no effect on the direction of TransAct Technologies i.e., TransAct Technologies and Nano Dimension go up and down completely randomly.

Pair Corralation between TransAct Technologies and Nano Dimension

Given the investment horizon of 90 days TransAct Technologies is expected to generate 5.36 times less return on investment than Nano Dimension. But when comparing it to its historical volatility, TransAct Technologies Incorporated is 1.27 times less risky than Nano Dimension. It trades about 0.01 of its potential returns per unit of risk. Nano Dimension is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  208.00  in Nano Dimension on September 6, 2024 and sell it today you would earn a total of  7.00  from holding Nano Dimension or generate 3.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.44%
ValuesDaily Returns

TransAct Technologies Incorpor  vs.  Nano Dimension

 Performance 
       Timeline  
TransAct Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Nano Dimension 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Nano Dimension are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Nano Dimension is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

TransAct Technologies and Nano Dimension Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TransAct Technologies and Nano Dimension

The main advantage of trading using opposite TransAct Technologies and Nano Dimension positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransAct Technologies position performs unexpectedly, Nano Dimension 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 Nano Dimension will offset losses from the drop in Nano Dimension's long position.
The idea behind TransAct Technologies Incorporated and Nano Dimension 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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