Correlation Between Cornerstone Strategic and Transcat

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

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

Diversification Opportunities for Cornerstone Strategic and Transcat

0.14

Correlation Coefficient

Cornerstone Strategic  Transcat

Average diversification

The 3 months correlation between Cornerstone and Transcat is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Transcat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcat and Cornerstone Strategic 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 Cornerstone Strategic Value are associated (or correlated) with Transcat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcat has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Transcat go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Transcat

Considering the 90-day investment horizon Cornerstone Strategic Value is expected to generate 0.29 times more return on investment than Transcat. However, Cornerstone Strategic Value is 3.42 times less risky than Transcat. It trades about 0.34 of its potential returns per unit of risk. Transcat is currently generating about -0.01 per unit of risk. If you would invest  675.00  in Cornerstone Strategic Value on May 3, 2025 and sell it today you would earn a total of  134.00  from holding Cornerstone Strategic Value or generate 19.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Cornerstone Strategic Value  vs.  Transcat

Cornerstone Strategic

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak essential indicators, Cornerstone Strategic displayed solid returns over the last few months and may actually be approaching a breakup point.

Transcat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Transcat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Transcat is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cornerstone Strategic and Transcat

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

The idea behind Cornerstone Strategic Value and Transcat 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.