Correlation Between Indutrade and Take Two
Can any of the company-specific risk be diversified away by investing in both Indutrade and Take Two 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 Indutrade and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and Take Two Interactive Software, you can compare the effects of market volatilities on Indutrade and Take Two 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 Indutrade with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Take Two.
Diversification Opportunities for Indutrade and Take Two
Very good diversification
The 3 months correlation between Indutrade and Take is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive and Indutrade 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 Indutrade AB are associated (or correlated) with Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of Indutrade i.e., Indutrade and Take Two go up and down completely randomly.
Pair Corralation between Indutrade and Take Two
Assuming the 90 days trading horizon Indutrade AB is expected to generate 1.26 times more return on investment than Take Two. However, Indutrade is 1.26 times more volatile than Take Two Interactive Software. It trades about 0.23 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.06 per unit of risk. If you would invest 27,540 in Indutrade AB on October 22, 2024 and sell it today you would earn a total of 2,140 from holding Indutrade AB or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Indutrade AB vs. Take Two Interactive Software
Performance |
| Timeline |
| Indutrade AB |
| Take Two Interactive |
Indutrade and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Take Two
The main advantage of trading using opposite Indutrade and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Take Two 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 Take Two will offset losses from the drop in Take Two's long position.| Indutrade vs. Home Depot | Indutrade vs. Weiss Korea Opportunity | Indutrade vs. River and Mercantile | Indutrade vs. Chrysalis Investments |
| Take Two vs. Anglo Asian Mining | Take Two vs. Griffin Mining | Take Two vs. Thor Mining PLC | Take Two vs. Pan American Silver |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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