Correlation Between Take Two and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both Take Two and Abingdon Health 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 Abingdon Health 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 Abingdon Health Plc, you can compare the effects of market volatilities on Take Two and Abingdon Health 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 Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Abingdon Health.
Diversification Opportunities for Take Two and Abingdon Health
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Take and Abingdon is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc 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 Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Take Two i.e., Take Two and Abingdon Health go up and down completely randomly.
Pair Corralation between Take Two and Abingdon Health
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.35 times more return on investment than Abingdon Health. However, Take Two Interactive Software is 2.82 times less risky than Abingdon Health. It trades about 0.25 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about -0.03 per unit of risk. If you would invest 17,862 in Take Two Interactive Software on September 12, 2024 and sell it today you would earn a total of 1,166 from holding Take Two Interactive Software or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Abingdon Health Plc
Performance |
| Timeline |
| Take Two Interactive |
| Abingdon Health Plc |
Take Two and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Abingdon Health
The main advantage of trading using opposite Take Two and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Abingdon Health 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 Abingdon Health will offset losses from the drop in Abingdon Health's long position.| Take Two vs. Hong Kong Land | Take Two vs. Neometals | Take Two vs. Coor Service Management | Take Two vs. Fidelity Sustainable USD |
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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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