Correlation Between Take Two and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Take Two and Solstad Offshore 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 Take Two and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Take Two Interactive Software and Solstad Offshore ASA, you can compare the effects of market volatilities on Take Two and Solstad Offshore 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 Take Two with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Solstad Offshore.
Diversification Opportunities for Take Two and Solstad Offshore
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Take and Solstad is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA and Take Two 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 Take Two Interactive Software are associated (or correlated) with Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of Take Two i.e., Take Two and Solstad Offshore go up and down completely randomly.
Pair Corralation between Take Two and Solstad Offshore
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.77 times more return on investment than Solstad Offshore. However, Take Two Interactive Software is 1.29 times less risky than Solstad Offshore. It trades about -0.07 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about -0.12 per unit of risk. If you would invest 18,858 in Take Two Interactive Software on November 7, 2024 and sell it today you would lose (474.00) from holding Take Two Interactive Software or give up 2.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Solstad Offshore ASA
Performance |
| Timeline |
| Take Two Interactive |
| Solstad Offshore ASA |
Take Two and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Solstad Offshore
The main advantage of trading using opposite Take Two and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore's long position.| Take Two vs. Samsung Electronics Co | Take Two vs. Samsung Electronics Co | Take Two vs. Toyota Motor Corp | Take Two vs. Reliance Industries Ltd |
| Solstad Offshore vs. Intermediate Capital Group | Solstad Offshore vs. Zinc Media Group | Solstad Offshore vs. LBG Media PLC | Solstad Offshore vs. Molson Coors Beverage |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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