Correlation Between Check Point and Take Two
Can any of the company-specific risk be diversified away by investing in both Check Point and Take Two 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 Check Point and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Point Software and Take Two Interactive Software, you can compare the effects of market volatilities on Check Point and Take Two 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 Check Point with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Take Two.
Diversification Opportunities for Check Point and Take Two
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Check and Take is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive and Check Point 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 Check Point Software are associated (or correlated) with Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of Check Point i.e., Check Point and Take Two go up and down completely randomly.
Pair Corralation between Check Point and Take Two
Assuming the 90 days trading horizon Check Point Software is expected to under-perform the Take Two. But the stock apears to be less risky and, when comparing its historical volatility, Check Point Software is 2.95 times less risky than Take Two. The stock trades about -0.01 of its potential returns per unit of risk. The Take Two Interactive Software is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 18,632 in Take Two Interactive Software on December 2, 2024 and sell it today you would earn a total of 2,280 from holding Take Two Interactive Software or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Check Point Software vs. Take Two Interactive Software
Performance |
| Timeline |
| Check Point Software |
| Take Two Interactive |
Check Point and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Take Two
The main advantage of trading using opposite Check Point and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point position performs unexpectedly, Take Two 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 Take Two will offset losses from the drop in Take Two's long position.| Check Point vs. Home Depot | ||
| Check Point vs. International Consolidated Airlines | ||
| Check Point vs. Ecclesiastical Insurance Office | ||
| Check Point vs. Teradata Corp |
| Take Two vs. UNIQA Insurance Group | ||
| Take Two vs. Ebro Foods | ||
| Take Two vs. JLEN Environmental Assets | ||
| Take Two vs. Ecclesiastical Insurance Office |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |