Correlation Between Polar Capital and Take Two
Can any of the company-specific risk be diversified away by investing in both Polar Capital 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 Polar Capital and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Capital Technology and Take Two Interactive Software, you can compare the effects of market volatilities on Polar Capital 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 Polar Capital with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Take Two.
Diversification Opportunities for Polar Capital and Take Two
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polar and Take is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital 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 Polar Capital 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 Polar Capital Technology 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 Polar Capital i.e., Polar Capital and Take Two go up and down completely randomly.
Pair Corralation between Polar Capital and Take Two
Assuming the 90 days trading horizon Polar Capital is expected to generate 2.73 times less return on investment than Take Two. But when comparing it to its historical volatility, Polar Capital Technology is 1.02 times less risky than Take Two. It trades about 0.15 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 16,122 in Take Two Interactive Software on August 30, 2024 and sell it today you would earn a total of 2,655 from holding Take Two Interactive Software or generate 16.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. Take Two Interactive Software
Performance |
| Timeline |
| Polar Capital Technology |
| Take Two Interactive |
Polar Capital and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Take Two
The main advantage of trading using opposite Polar Capital and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital 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.| Polar Capital vs. Samsung Electronics Co | Polar Capital vs. Samsung Electronics Co | Polar Capital vs. Hyundai Motor | Polar Capital vs. Toyota Motor Corp |
| Take Two vs. Tungsten West PLC | Take Two vs. Argo Group Limited | Take Two vs. Hardide PLC | Take Two vs. Versarien PLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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