Correlation Between Take Two and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Take Two and CATLIN GROUP 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 CATLIN GROUP 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 CATLIN GROUP , you can compare the effects of market volatilities on Take Two and CATLIN GROUP 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 CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and CATLIN GROUP.
Diversification Opportunities for Take Two and CATLIN GROUP
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Take and CATLIN is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP 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 CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of Take Two i.e., Take Two and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Take Two and CATLIN GROUP
Assuming the 90 days trading horizon Take Two Interactive Software is expected to under-perform the CATLIN GROUP. In addition to that, Take Two is 4.94 times more volatile than CATLIN GROUP . It trades about -0.1 of its total potential returns per unit of risk. CATLIN GROUP is currently generating about -0.22 per unit of volatility. If you would invest 9,500 in CATLIN GROUP on September 24, 2024 and sell it today you would lose (100.00) from holding CATLIN GROUP or give up 1.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Take Two Interactive Software vs. CATLIN GROUP
Performance |
Timeline |
Take Two Interactive |
CATLIN GROUP |
Take Two and CATLIN GROUP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Take Two and CATLIN GROUP
The main advantage of trading using opposite Take Two and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, CATLIN GROUP 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP's long position.Take Two vs. Uniper SE | Take Two vs. Mulberry Group PLC | Take Two vs. London Security Plc | Take Two vs. Triad Group PLC |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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