Correlation Between AECOM TECHNOLOGY and Take-Two Interactive
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and Take-Two Interactive 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 AECOM TECHNOLOGY and Take-Two Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and Take Two Interactive Software, you can compare the effects of market volatilities on AECOM TECHNOLOGY and Take-Two Interactive 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 AECOM TECHNOLOGY with a short position of Take-Two Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and Take-Two Interactive.
Diversification Opportunities for AECOM TECHNOLOGY and Take-Two Interactive
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AECOM and Take-Two is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY are associated (or correlated) with Take-Two Interactive. 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 AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and Take-Two Interactive go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and Take-Two Interactive
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to under-perform the Take-Two Interactive. But the stock apears to be less risky and, when comparing its historical volatility, AECOM TECHNOLOGY is 1.29 times less risky than Take-Two Interactive. The stock trades about -0.07 of its potential returns per unit of risk. The Take Two Interactive Software is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 17,826 in Take Two Interactive Software on November 3, 2024 and sell it today you would earn a total of 506.00 from holding Take Two Interactive Software or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. Take Two Interactive Software
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| Take Two Interactive |
AECOM TECHNOLOGY and Take-Two Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and Take-Two Interactive
The main advantage of trading using opposite AECOM TECHNOLOGY and Take-Two Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, Take-Two Interactive 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 Interactive will offset losses from the drop in Take-Two Interactive's long position.| AECOM TECHNOLOGY vs. MCEWEN MINING INC | AECOM TECHNOLOGY vs. MPH Health Care | AECOM TECHNOLOGY vs. MAGNUM MINING EXP | AECOM TECHNOLOGY vs. Ringmetall SE |
| Take-Two Interactive vs. Nintendo Co | Take-Two Interactive vs. Nintendo Co | Take-Two Interactive vs. Sea Limited | Take-Two Interactive vs. Electronic Arts |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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