Correlation Between Take Two and Ally Financial
Can any of the company-specific risk be diversified away by investing in both Take Two and Ally Financial 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 Ally Financial 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 Ally Financial, you can compare the effects of market volatilities on Take Two and Ally Financial 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 Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Ally Financial.
Diversification Opportunities for Take Two and Ally Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Take and Ally is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial 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 Ally Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Financial has no effect on the direction of Take Two i.e., Take Two and Ally Financial go up and down completely randomly.
Pair Corralation between Take Two and Ally Financial
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.68 times more return on investment than Ally Financial. However, Take Two Interactive Software is 1.48 times less risky than Ally Financial. It trades about 0.05 of its potential returns per unit of risk. Ally Financial is currently generating about 0.03 per unit of risk. If you would invest 15,906 in Take Two Interactive Software on September 14, 2024 and sell it today you would earn a total of 2,976 from holding Take Two Interactive Software or generate 18.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.81% |
| Values | Daily Returns |
Take Two Interactive Software vs. Ally Financial
Performance |
| Timeline |
| Take Two Interactive |
| Ally Financial |
Take Two and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Ally Financial
The main advantage of trading using opposite Take Two and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Ally Financial 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 Ally Financial will offset losses from the drop in Ally Financial's long position.| Take Two vs. Lowland Investment Co | Take Two vs. GoldMining | Take Two vs. Taylor Maritime Investments | Take Two vs. Empire Metals Limited |
| Ally Financial vs. Cars Inc | Ally Financial vs. Caledonia Mining | Ally Financial vs. CAP LEASE AVIATION | Ally Financial vs. Atalaya Mining |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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