Correlation Between Take Two and North Atlantic
Can any of the company-specific risk be diversified away by investing in both Take Two and North Atlantic 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 North Atlantic 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 North Atlantic Smaller, you can compare the effects of market volatilities on Take Two and North Atlantic 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 North Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and North Atlantic.
Diversification Opportunities for Take Two and North Atlantic
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Take and North is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and North Atlantic Smaller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Atlantic Smaller 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 North Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Atlantic Smaller has no effect on the direction of Take Two i.e., Take Two and North Atlantic go up and down completely randomly.
Pair Corralation between Take Two and North Atlantic
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 1.01 times more return on investment than North Atlantic. However, Take Two is 1.01 times more volatile than North Atlantic Smaller. It trades about 0.08 of its potential returns per unit of risk. North Atlantic Smaller is currently generating about 0.01 per unit of risk. If you would invest 10,267 in Take Two Interactive Software on September 21, 2024 and sell it today you would earn a total of 7,925 from holding Take Two Interactive Software or generate 77.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Take Two Interactive Software vs. North Atlantic Smaller
Performance |
| Timeline |
| Take Two Interactive |
| North Atlantic Smaller |
Take Two and North Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and North Atlantic
The main advantage of trading using opposite Take Two and North Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, North Atlantic 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 North Atlantic will offset losses from the drop in North Atlantic's long position.| Take Two vs. GoldMining | Take Two vs. Southern Copper Corp | Take Two vs. Cornish Metals | Take Two vs. Trainline Plc |
| North Atlantic vs. Take Two Interactive Software | North Atlantic vs. Catalyst Media Group | North Atlantic vs. Alfa Financial Software | North Atlantic vs. Centaur Media |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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