Correlation Between Citizens Financial and Take Two
Can any of the company-specific risk be diversified away by investing in both Citizens Financial 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 Citizens Financial and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Group, and Take Two Interactive Software, you can compare the effects of market volatilities on Citizens Financial 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 Citizens Financial with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Take Two.
Diversification Opportunities for Citizens Financial and Take Two
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citizens and Take is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, 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 Citizens Financial 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 Citizens Financial Group, 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 Citizens Financial i.e., Citizens Financial and Take Two go up and down completely randomly.
Pair Corralation between Citizens Financial and Take Two
Assuming the 90 days trading horizon Citizens Financial is expected to generate 1.72 times less return on investment than Take Two. In addition to that, Citizens Financial is 1.26 times more volatile than Take Two Interactive Software. It trades about 0.04 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.08 per unit of volatility. If you would invest 13,649 in Take Two Interactive Software on October 27, 2024 and sell it today you would earn a total of 13,539 from holding Take Two Interactive Software or generate 99.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.79% |
| Values | Daily Returns |
Citizens Financial Group, vs. Take Two Interactive Software
Performance |
| Timeline |
| Citizens Financial Group, |
| Take Two Interactive |
Citizens Financial and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Take Two
The main advantage of trading using opposite Citizens Financial and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial 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.| Citizens Financial vs. Annaly Capital Management, | Citizens Financial vs. DENTSPLY SIRONA | Citizens Financial vs. United Rentals | Citizens Financial vs. Unifique Telecomunicaes SA |
| Take Two vs. Arrow Electronics, | Take Two vs. Iron Mountain Incorporated | Take Two vs. JB Hunt Transport | Take Two vs. Martin Marietta Materials, |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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