Correlation Between Take Two and Basic Materials
Can any of the company-specific risk be diversified away by investing in both Take Two and Basic Materials 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 Basic Materials 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 Basic Materials, you can compare the effects of market volatilities on Take Two and Basic Materials 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 Basic Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Basic Materials.
Diversification Opportunities for Take Two and Basic Materials
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Take and Basic is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Basic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basic Materials 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 Basic Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basic Materials has no effect on the direction of Take Two i.e., Take Two and Basic Materials go up and down completely randomly.
Pair Corralation between Take Two and Basic Materials
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 1.63 times more return on investment than Basic Materials. However, Take Two is 1.63 times more volatile than Basic Materials. It trades about 0.08 of its potential returns per unit of risk. Basic Materials is currently generating about 0.01 per unit of risk. If you would invest 13,814 in Take Two Interactive Software on September 3, 2024 and sell it today you would earn a total of 14,528 from holding Take Two Interactive Software or generate 105.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Basic Materials
Performance |
| Timeline |
Take Two and Basic Materials Volatility Contrast
Predicted Return Density |
| Returns |
Take Two Interactive Software
Pair trading matchups for Take Two
Basic Materials
Pair trading matchups for Basic Materials
Pair Trading with Take Two and Basic Materials
The main advantage of trading using opposite Take Two and Basic Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Basic Materials 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 Basic Materials will offset losses from the drop in Basic Materials' long position.| Take Two vs. Electronic Arts | Take Two vs. Bilibili | Take Two vs. Fundo Investimento Imobiliario | Take Two vs. Fras le SA |
| Basic Materials vs. G2D Investments | Basic Materials vs. Take Two Interactive Software | Basic Materials vs. Dell Technologies | Basic Materials vs. Brpr Corporate Offices |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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