Correlation Between Abingdon Health and Take Two

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Can any of the company-specific risk be diversified away by investing in both Abingdon Health 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 Abingdon Health and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abingdon Health Plc and Take Two Interactive Software, you can compare the effects of market volatilities on Abingdon Health 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 Abingdon Health with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Take Two.

Diversification Opportunities for Abingdon Health and Take Two

-0.87
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Abingdon and Take is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc 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 Abingdon Health 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 Abingdon Health Plc 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 Abingdon Health i.e., Abingdon Health and Take Two go up and down completely randomly.

Pair Corralation between Abingdon Health and Take Two

Assuming the 90 days trading horizon Abingdon Health Plc is expected to under-perform the Take Two. In addition to that, Abingdon Health is 2.82 times more volatile than Take Two Interactive Software. It trades about -0.03 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.25 per unit of volatility. If you would invest  17,862  in Take Two Interactive Software on September 12, 2024 and sell it today you would earn a total of  1,166  from holding Take Two Interactive Software or generate 6.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Abingdon Health Plc  vs.  Take Two Interactive Software

 Performance 
       Timeline  
Abingdon Health Plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Abingdon Health Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Take Two Interactive 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Take Two unveiled solid returns over the last few months and may actually be approaching a breakup point.

Abingdon Health and Take Two Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Abingdon Health and Take Two

The main advantage of trading using opposite Abingdon Health and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health 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.
The idea behind Abingdon Health Plc and Take Two Interactive Software pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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