Correlation Between Arcontech Group and Take Two
Can any of the company-specific risk be diversified away by investing in both Arcontech Group 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 Arcontech Group and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcontech Group Plc and Take Two Interactive Software, you can compare the effects of market volatilities on Arcontech Group 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 Arcontech Group with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcontech Group and Take Two.
Diversification Opportunities for Arcontech Group and Take Two
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arcontech and Take is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Arcontech Group 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 Arcontech Group 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 Arcontech Group 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 Arcontech Group i.e., Arcontech Group and Take Two go up and down completely randomly.
Pair Corralation between Arcontech Group and Take Two
Assuming the 90 days trading horizon Arcontech Group Plc is expected to under-perform the Take Two. But the stock apears to be less risky and, when comparing its historical volatility, Arcontech Group Plc is 1.4 times less risky than Take Two. The stock trades about -0.33 of its potential returns per unit of risk. The Take Two Interactive Software is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 18,189 in Take Two Interactive Software on November 2, 2024 and sell it today you would earn a total of 868.00 from holding Take Two Interactive Software or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Arcontech Group Plc vs. Take Two Interactive Software
Performance |
| Timeline |
| Arcontech Group Plc |
| Take Two Interactive |
Arcontech Group and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcontech Group and Take Two
The main advantage of trading using opposite Arcontech Group and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcontech Group 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.| Arcontech Group vs. China Pacific Insurance | Arcontech Group vs. Cairo Communication SpA | Arcontech Group vs. Spirent Communications plc | Arcontech Group vs. Verizon Communications |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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