Correlation Between GameStop Corp and Take Two
Can any of the company-specific risk be diversified away by investing in both GameStop Corp 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 GameStop Corp and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Take Two Interactive Software, you can compare the effects of market volatilities on GameStop Corp 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 GameStop Corp with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Take Two.
Diversification Opportunities for GameStop Corp and Take Two
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GameStop and Take is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp 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 GameStop Corp 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 GameStop Corp 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 GameStop Corp i.e., GameStop Corp and Take Two go up and down completely randomly.
Pair Corralation between GameStop Corp and Take Two
Considering the 90-day investment horizon GameStop Corp is expected to generate 7.4 times more return on investment than Take Two. However, GameStop Corp is 7.4 times more volatile than Take Two Interactive Software. It trades about 0.11 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.09 per unit of risk. If you would invest 1,006 in GameStop Corp on October 12, 2024 and sell it today you would earn a total of 2,290 from holding GameStop Corp or generate 227.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. Take Two Interactive Software
Performance |
| Timeline |
| GameStop Corp |
| Take Two Interactive |
GameStop Corp and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Take Two
The main advantage of trading using opposite GameStop Corp and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp 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.| GameStop Corp vs. RH | GameStop Corp vs. Dicks Sporting Goods | GameStop Corp vs. Best Buy Co | GameStop Corp vs. AutoZone |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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