Correlation Between Take Two and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Take Two and Duke Energy 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 Duke Energy 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 Duke Energy, you can compare the effects of market volatilities on Take Two and Duke Energy 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 Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Duke Energy.
Diversification Opportunities for Take Two and Duke Energy
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Take and Duke is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy 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 Duke Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duke Energy has no effect on the direction of Take Two i.e., Take Two and Duke Energy go up and down completely randomly.
Pair Corralation between Take Two and Duke Energy
Assuming the 90 days trading horizon Take Two is expected to generate 1.31 times less return on investment than Duke Energy. In addition to that, Take Two is 1.13 times more volatile than Duke Energy. It trades about 0.07 of its total potential returns per unit of risk. Duke Energy is currently generating about 0.11 per unit of volatility. If you would invest 43,692 in Duke Energy on September 12, 2024 and sell it today you would earn a total of 23,515 from holding Duke Energy or generate 53.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 75.99% |
| Values | Daily Returns |
Take Two Interactive Software vs. Duke Energy
Performance |
| Timeline |
| Take Two Interactive |
| Duke Energy |
Take Two and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Duke Energy
The main advantage of trading using opposite Take Two and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Duke Energy 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 Duke Energy will offset losses from the drop in Duke Energy's long position.| Take Two vs. Deutsche Bank Aktiengesellschaft | Take Two vs. Zoom Video Communications | Take Two vs. Automatic Data Processing | Take Two vs. Mitsubishi UFJ Financial |
| Duke Energy vs. United Rentals | Duke Energy vs. Bemobi Mobile Tech | Duke Energy vs. Autohome | Duke Energy vs. Take Two Interactive Software |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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