Correlation Between Take Two and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Take Two and Caledonia 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 Caledonia 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 Caledonia Mining, you can compare the effects of market volatilities on Take Two and Caledonia 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 Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Caledonia Mining.
Diversification Opportunities for Take Two and Caledonia Mining
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Take and Caledonia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia 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 Caledonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Mining has no effect on the direction of Take Two i.e., Take Two and Caledonia Mining go up and down completely randomly.
Pair Corralation between Take Two and Caledonia Mining
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.56 times more return on investment than Caledonia Mining. However, Take Two Interactive Software is 1.78 times less risky than Caledonia Mining. It trades about 0.36 of its potential returns per unit of risk. Caledonia Mining is currently generating about -0.42 per unit of risk. If you would invest 16,417 in Take Two Interactive Software on September 2, 2024 and sell it today you would earn a total of 2,344 from holding Take Two Interactive Software or generate 14.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Caledonia Mining
Performance |
| Timeline |
| Take Two Interactive |
| Caledonia Mining |
Take Two and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Caledonia Mining
The main advantage of trading using opposite Take Two and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Caledonia 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 Caledonia Mining will offset losses from the drop in Caledonia Mining's long position.| Take Two vs. Taylor Maritime Investments | Take Two vs. Herald Investment Trust | Take Two vs. Sealed Air Corp | Take Two vs. Intuitive Investments Group |
| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Centamin PLC | Caledonia Mining vs. Atalaya 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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