Correlation Between Take Two and GoPro
Can any of the company-specific risk be diversified away by investing in both Take Two and GoPro 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 GoPro 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 GoPro Inc, you can compare the effects of market volatilities on Take Two and GoPro 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 GoPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and GoPro.
Diversification Opportunities for Take Two and GoPro
Modest diversification
The 3 months correlation between Take and GoPro is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and GoPro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoPro Inc 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 GoPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoPro Inc has no effect on the direction of Take Two i.e., Take Two and GoPro go up and down completely randomly.
Pair Corralation between Take Two and GoPro
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.33 times more return on investment than GoPro. However, Take Two Interactive Software is 3.04 times less risky than GoPro. It trades about 0.43 of its potential returns per unit of risk. GoPro Inc is currently generating about -0.02 per unit of risk. If you would invest 24,104 in Take Two Interactive Software on September 2, 2024 and sell it today you would earn a total of 4,238 from holding Take Two Interactive Software or generate 17.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. GoPro Inc
Performance |
| Timeline |
| Take Two Interactive |
| GoPro Inc |
Take Two and GoPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and GoPro
The main advantage of trading using opposite Take Two and GoPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, GoPro 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 GoPro will offset losses from the drop in GoPro's long position.| Take Two vs. Fras le SA | Take Two vs. Energisa SA | Take Two vs. Clave Indices De | Take Two vs. BTG Pactual Logstica |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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