Correlation Between TransAKT and Tytan Holdings

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

By analyzing existing cross correlation between TransAKT and Tytan Holdings, you can compare the effects of market volatilities on TransAKT and Tytan Holdings 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 Tytan Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAKT and Tytan Holdings.

Diversification Opportunities for TransAKT and Tytan Holdings

-0.53

Correlation Coefficient

TransAKT  Tytan Holdings

Excellent diversification

The 3 months correlation between TransAKT and Tytan is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding TransAKT and Tytan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tytan Holdings 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 Tytan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tytan Holdings has no effect on the direction of TransAKT i.e., TransAKT and Tytan Holdings go up and down completely randomly.

Pair Corralation between TransAKT and Tytan Holdings

Given the investment horizon of 90 days TransAKT is expected to generate 14.68 times more return on investment than Tytan Holdings. However, TransAKT is 14.68 times more volatile than Tytan Holdings. It trades about 0.16 of its potential returns per unit of risk. Tytan Holdings is currently generating about -0.13 per unit of risk. If you would invest  0.51  in TransAKT on September 28, 2024 and sell it today you would lose (0.24) from holding TransAKT or give up 47.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

TransAKT  vs.  Tytan Holdings

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.

Tytan Holdings

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Tytan Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with TransAKT and Tytan Holdings

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

The idea behind TransAKT and Tytan Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.