Correlation Between Pets At and Take Two
Can any of the company-specific risk be diversified away by investing in both Pets At 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 Pets At and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pets at Home and Take Two Interactive Software, you can compare the effects of market volatilities on Pets At 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 Pets At with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pets At and Take Two.
Diversification Opportunities for Pets At and Take Two
Excellent diversification
The 3 months correlation between Pets and Take is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pets at Home 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 Pets At 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 Pets at Home 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 Pets At i.e., Pets At and Take Two go up and down completely randomly.
Pair Corralation between Pets At and Take Two
Assuming the 90 days trading horizon Pets at Home is expected to generate 1.47 times more return on investment than Take Two. However, Pets At is 1.47 times more volatile than Take Two Interactive Software. It trades about 0.2 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about -0.07 per unit of risk. If you would invest 20,540 in Pets at Home on November 7, 2024 and sell it today you would earn a total of 1,880 from holding Pets at Home or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pets at Home vs. Take Two Interactive Software
Performance |
| Timeline |
| Pets at Home |
| Take Two Interactive |
Pets At and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pets At and Take Two
The main advantage of trading using opposite Pets At and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pets At 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.| Pets At vs. Waste Management | Pets At vs. Advanced Medical Solutions | Pets At vs. Alliance Data Systems | Pets At vs. Jupiter Fund Management |
| Take Two vs. Samsung Electronics Co | Take Two vs. Samsung Electronics Co | Take Two vs. Toyota Motor Corp | Take Two vs. Reliance Industries Ltd |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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