Correlation Between Take Two and Comerica
Can any of the company-specific risk be diversified away by investing in both Take Two and Comerica 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 Comerica 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 Comerica, you can compare the effects of market volatilities on Take Two and Comerica 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 Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Comerica.
Diversification Opportunities for Take Two and Comerica
Modest diversification
The 3 months correlation between Take and Comerica is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica 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 Comerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comerica has no effect on the direction of Take Two i.e., Take Two and Comerica go up and down completely randomly.
Pair Corralation between Take Two and Comerica
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 1.89 times more return on investment than Comerica. However, Take Two is 1.89 times more volatile than Comerica. It trades about 0.15 of its potential returns per unit of risk. Comerica is currently generating about 0.06 per unit of risk. If you would invest 18,898 in Take Two Interactive Software on November 28, 2024 and sell it today you would earn a total of 1,971 from holding Take Two Interactive Software or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Take Two Interactive Software vs. Comerica
Performance |
| Timeline |
| Take Two Interactive |
| Comerica |
Take Two and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Comerica
The main advantage of trading using opposite Take Two and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Comerica 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 Comerica will offset losses from the drop in Comerica's long position.| Take Two vs. Omega Healthcare Investors | Take Two vs. First Class Metals | Take Two vs. Central Asia Metals | Take Two vs. Silvercorp Metals |
| Comerica vs. Gaming Realms plc | Comerica vs. Wyndham Hotels Resorts | Comerica vs. Broadcom | Comerica vs. Dalata Hotel Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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