Correlation Between Take Two and MT Bank
Can any of the company-specific risk be diversified away by investing in both Take Two and MT Bank 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 MT Bank 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 MT Bank Corp, you can compare the effects of market volatilities on Take Two and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and MT Bank.
Diversification Opportunities for Take Two and MT Bank
Almost no diversification
The 3 months correlation between Take and 0JW2 is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Take Two i.e., Take Two and MT Bank go up and down completely randomly.
Pair Corralation between Take Two and MT Bank
Assuming the 90 days trading horizon Take Two is expected to generate 1.89 times less return on investment than MT Bank. But when comparing it to its historical volatility, Take Two Interactive Software is 1.16 times less risky than MT Bank. It trades about 0.09 of its potential returns per unit of risk. MT Bank Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11,642 in MT Bank Corp on September 1, 2024 and sell it today you would earn a total of 10,357 from holding MT Bank Corp or generate 88.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.55% |
| Values | Daily Returns |
Take Two Interactive Software vs. MT Bank Corp
Performance |
| Timeline |
| Take Two Interactive |
| MT Bank Corp |
Take Two and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and MT Bank
The main advantage of trading using opposite Take Two and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| Take Two vs. GoldMining | Take Two vs. Central Asia Metals | Take Two vs. Cornish Metals | Take Two vs. Impax Environmental Markets |
| MT Bank vs. McEwen Mining | MT Bank vs. iShares Physical Silver | MT Bank vs. Beowulf Mining | MT Bank vs. Blackrock World 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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