Correlation Between Take Two and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Take Two and Braskem SA 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 Take Two and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Take Two Interactive Software and Braskem SA, you can compare the effects of market volatilities on Take Two and Braskem SA 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 Take Two with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Braskem SA.
Diversification Opportunities for Take Two and Braskem SA
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Take and Braskem is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Braskem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braskem SA and Take Two 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 Take Two Interactive Software are associated (or correlated) with Braskem SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braskem SA has no effect on the direction of Take Two i.e., Take Two and Braskem SA go up and down completely randomly.
Pair Corralation between Take Two and Braskem SA
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 2.3 times more return on investment than Braskem SA. However, Take Two is 2.3 times more volatile than Braskem SA. It trades about 0.13 of its potential returns per unit of risk. Braskem SA is currently generating about -0.45 per unit of risk. If you would invest 27,550 in Take Two Interactive Software on November 29, 2024 and sell it today you would earn a total of 2,960 from holding Take Two Interactive Software or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Braskem SA
Performance |
| Timeline |
| Take Two Interactive |
| Braskem SA |
Take Two and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Braskem SA
The main advantage of trading using opposite Take Two and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Braskem SA 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 Braskem SA will offset losses from the drop in Braskem SA's long position.| Take Two vs. T Mobile | Take Two vs. Waste Management | Take Two vs. Patria Investments Limited | Take Two vs. Caesars Entertainment, |
| Braskem SA vs. Clover Health Investments, | Braskem SA vs. ON Semiconductor | Braskem SA vs. Charter Communications | Braskem SA vs. United Airlines Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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