Correlation Between Take Two and State Bank
Can any of the company-specific risk be diversified away by investing in both Take Two and State Bank 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 State Bank 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 State Bank of, you can compare the effects of market volatilities on Take Two and State Bank 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 State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and State Bank.
Diversification Opportunities for Take Two and State Bank
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Take and State is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Take Two i.e., Take Two and State Bank go up and down completely randomly.
Pair Corralation between Take Two and State Bank
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 1.0 times more return on investment than State Bank. However, Take Two is 1.0 times more volatile than State Bank of. It trades about 0.36 of its potential returns per unit of risk. State Bank of is currently generating about 0.07 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. State Bank of
Performance |
| Timeline |
| Take Two Interactive |
| State Bank |
Take Two and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and State Bank
The main advantage of trading using opposite Take Two and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, State Bank 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 State Bank will offset losses from the drop in State Bank'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 |
| State Bank vs. MTI Wireless Edge | State Bank vs. Alfa Financial Software | State Bank vs. Infrastrutture Wireless Italiane | State Bank vs. Axway Software SA |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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