Correlation Between Take Two and General Dynamics
Can any of the company-specific risk be diversified away by investing in both Take Two and General Dynamics 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 General Dynamics 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 General Dynamics, you can compare the effects of market volatilities on Take Two and General Dynamics 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 General Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and General Dynamics.
Diversification Opportunities for Take Two and General Dynamics
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Take and General is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and General Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Dynamics 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 General Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Dynamics has no effect on the direction of Take Two i.e., Take Two and General Dynamics go up and down completely randomly.
Pair Corralation between Take Two and General Dynamics
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 1.16 times more return on investment than General Dynamics. However, Take Two is 1.16 times more volatile than General Dynamics. It trades about 0.27 of its potential returns per unit of risk. General Dynamics is currently generating about -0.01 per unit of risk. If you would invest 21,604 in Take Two Interactive Software on September 12, 2024 and sell it today you would earn a total of 6,872 from holding Take Two Interactive Software or generate 31.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Take Two Interactive Software vs. General Dynamics
Performance |
| Timeline |
| Take Two Interactive |
| General Dynamics |
Take Two and General Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and General Dynamics
The main advantage of trading using opposite Take Two and General Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, General Dynamics 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 General Dynamics will offset losses from the drop in General Dynamics' long position.| Take Two vs. Electronic Arts | Take Two vs. Fundo Investimento Imobiliario | Take Two vs. LESTE FDO INV | Take Two vs. Fras le SA |
| General Dynamics vs. The Trade Desk | General Dynamics vs. Unity Software | General Dynamics vs. salesforce inc | General Dynamics vs. MAHLE Metal Leve |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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