Correlation Between HSBC Holdings and Take Two
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings 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 HSBC Holdings and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC Holdings plc and Take Two Interactive Software, you can compare the effects of market volatilities on HSBC Holdings 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 HSBC Holdings with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Take Two.
Diversification Opportunities for HSBC Holdings and Take Two
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HSBC and Take is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings 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 HSBC Holdings 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 HSBC Holdings 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 HSBC Holdings i.e., HSBC Holdings and Take Two go up and down completely randomly.
Pair Corralation between HSBC Holdings and Take Two
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.72 times more return on investment than Take Two. However, HSBC Holdings plc is 1.39 times less risky than Take Two. It trades about 0.33 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 928.00 in HSBC Holdings plc on October 24, 2024 and sell it today you would earn a total of 56.00 from holding HSBC Holdings plc or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings plc vs. Take Two Interactive Software
Performance |
| Timeline |
| HSBC Holdings plc |
| Take Two Interactive |
HSBC Holdings and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Take Two
The main advantage of trading using opposite HSBC Holdings and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings 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.| HSBC Holdings vs. TYSON FOODS A | HSBC Holdings vs. BE Semiconductor Industries | HSBC Holdings vs. Nomad Foods | HSBC Holdings vs. PATTIES FOODS |
| Take Two vs. AECOM TECHNOLOGY | Take Two vs. CLOVER HEALTH INV | Take Two vs. SMA Solar Technology | Take Two vs. Kingdee International Software |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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