Correlation Between Take Two and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Take Two and McEwen Mining 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 McEwen Mining 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 McEwen Mining, you can compare the effects of market volatilities on Take Two and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and McEwen Mining.
Diversification Opportunities for Take Two and McEwen Mining
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Take and McEwen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Take Two i.e., Take Two and McEwen Mining go up and down completely randomly.
Pair Corralation between Take Two and McEwen Mining
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.59 times more return on investment than McEwen Mining. However, Take Two Interactive Software is 1.69 times less risky than McEwen Mining. It trades about 0.36 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.02 per unit of risk. If you would invest 16,386 in Take Two Interactive Software on September 5, 2024 and sell it today you would earn a total of 2,384 from holding Take Two Interactive Software or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. McEwen Mining
Performance |
| Timeline |
| Take Two Interactive |
| McEwen Mining |
Take Two and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and McEwen Mining
The main advantage of trading using opposite Take Two and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Take Two vs. Samsung Electronics Co | Take Two vs. Samsung Electronics Co | Take Two vs. Hyundai Motor | Take Two vs. Toyota Motor Corp |
| McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Hyundai Motor | McEwen Mining vs. Toyota Motor Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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