Correlation Between Norwegian Cruise and Take Two
Can any of the company-specific risk be diversified away by investing in both Norwegian Cruise 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 Norwegian Cruise and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norwegian Cruise Line and Take Two Interactive Software, you can compare the effects of market volatilities on Norwegian Cruise 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 Norwegian Cruise with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Cruise and Take Two.
Diversification Opportunities for Norwegian Cruise and Take Two
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Norwegian and Take is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Cruise Line 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 Norwegian Cruise 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 Norwegian Cruise Line 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 Norwegian Cruise i.e., Norwegian Cruise and Take Two go up and down completely randomly.
Pair Corralation between Norwegian Cruise and Take Two
Assuming the 90 days trading horizon Norwegian Cruise is expected to generate 7.1 times less return on investment than Take Two. In addition to that, Norwegian Cruise is 1.13 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 0.28 per unit of volatility. If you would invest 26,000 in Take Two Interactive Software on September 13, 2024 and sell it today you would earn a total of 2,476 from holding Take Two Interactive Software or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Cruise Line vs. Take Two Interactive Software
Performance |
| Timeline |
| Norwegian Cruise Line |
| Take Two Interactive |
Norwegian Cruise and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Cruise and Take Two
The main advantage of trading using opposite Norwegian Cruise and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Cruise 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.| Norwegian Cruise vs. Royal Caribbean Cruises | Norwegian Cruise vs. Expedia Group | Norwegian Cruise vs. Carnival plc | Norwegian Cruise vs. Tripadvisor |
| Take Two vs. Electronic Arts | Take Two vs. Bilibili | Take Two vs. Fundo Investimento Imobiliario | Take Two vs. LESTE FDO INV |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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