Correlation Between STMicroelectronics and Take-Two Interactive
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Take-Two Interactive 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 STMicroelectronics and Take-Two Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Take Two Interactive Software, you can compare the effects of market volatilities on STMicroelectronics and Take-Two Interactive 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 STMicroelectronics with a short position of Take-Two Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Take-Two Interactive.
Diversification Opportunities for STMicroelectronics and Take-Two Interactive
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STMicroelectronics and Take-Two is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV 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 STMicroelectronics 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 STMicroelectronics NV are associated (or correlated) with Take-Two Interactive. 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 STMicroelectronics i.e., STMicroelectronics and Take-Two Interactive go up and down completely randomly.
Pair Corralation between STMicroelectronics and Take-Two Interactive
Assuming the 90 days horizon STMicroelectronics NV is expected to under-perform the Take-Two Interactive. In addition to that, STMicroelectronics is 1.26 times more volatile than Take Two Interactive Software. It trades about -0.02 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.08 per unit of volatility. If you would invest 9,485 in Take Two Interactive Software on October 11, 2024 and sell it today you would earn a total of 8,219 from holding Take Two Interactive Software or generate 86.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Take Two Interactive Software
Performance |
| Timeline |
| STMicroelectronics |
| Take Two Interactive |
STMicroelectronics and Take-Two Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Take-Two Interactive
The main advantage of trading using opposite STMicroelectronics and Take-Two Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Take-Two Interactive 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 Interactive will offset losses from the drop in Take-Two Interactive's long position.| STMicroelectronics vs. FEMALE HEALTH | STMicroelectronics vs. Fuji Media Holdings | STMicroelectronics vs. REMEDY ENTERTAINMENT OYJ | STMicroelectronics vs. Ubisoft Entertainment SA |
| Take-Two Interactive vs. LOANDEPOT INC A | Take-Two Interactive vs. Meiko Electronics Co | Take-Two Interactive vs. Electronic Arts | Take-Two Interactive vs. STMicroelectronics NV |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |