Correlation Between Fathom Holdings and Transcontinental

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

By analyzing existing cross correlation between Fathom Holdings and Transcontinental Realty Investors, you can compare the effects of market volatilities on Fathom Holdings and Transcontinental 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 Fathom Holdings with a short position of Transcontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fathom Holdings and Transcontinental.

Diversification Opportunities for Fathom Holdings and Transcontinental

-0.21

Correlation Coefficient

Fathom Holdings  Transcontinental

Very good diversification

The 3 months correlation between Fathom and Transcontinental is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fathom Holdings and Transcontinental Realty Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcontinental Realty and Fathom Holdings 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 Fathom Holdings are associated (or correlated) with Transcontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcontinental Realty has no effect on the direction of Fathom Holdings i.e., Fathom Holdings and Transcontinental go up and down completely randomly.

Pair Corralation between Fathom Holdings and Transcontinental

Given the investment horizon of 90 days Fathom Holdings is expected to generate 1.17 times less return on investment than Transcontinental. In addition to that, Fathom Holdings is 1.91 times more volatile than Transcontinental Realty Investors. It trades about 0.19 of its total potential returns per unit of risk. Transcontinental Realty Investors is currently generating about 0.43 per unit of volatility. If you would invest  2,847  in Transcontinental Realty Investors on February 12, 2025 and sell it today you would earn a total of  757.00  from holding Transcontinental Realty Investors or generate 26.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Fathom Holdings  vs.  Transcontinental Realty Invest

Fathom Holdings

Risk-Adjusted Performance

Very Weak

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

Transcontinental Realty

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transcontinental Realty Investors are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental indicators, Transcontinental demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fathom Holdings and Transcontinental

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

The idea behind Fathom Holdings and Transcontinental Realty Investors 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.