Correlation Between Take Two and Livetech
Can any of the company-specific risk be diversified away by investing in both Take Two and Livetech 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 Livetech 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 Livetech da Bahia, you can compare the effects of market volatilities on Take Two and Livetech 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 Livetech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Livetech.
Diversification Opportunities for Take Two and Livetech
Pay attention - limited upside
The 3 months correlation between Take and Livetech is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Livetech da Bahia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livetech da Bahia 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 Livetech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livetech da Bahia has no effect on the direction of Take Two i.e., Take Two and Livetech go up and down completely randomly.
Pair Corralation between Take Two and Livetech
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 1.34 times more return on investment than Livetech. However, Take Two is 1.34 times more volatile than Livetech da Bahia. It trades about 0.41 of its potential returns per unit of risk. Livetech da Bahia is currently generating about -0.37 per unit of risk. If you would invest 23,205 in Take Two Interactive Software on August 26, 2024 and sell it today you would earn a total of 3,997 from holding Take Two Interactive Software or generate 17.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Livetech da Bahia
Performance |
| Timeline |
| Take Two Interactive |
| Livetech da Bahia |
Take Two and Livetech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Livetech
The main advantage of trading using opposite Take Two and Livetech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Livetech 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 Livetech will offset losses from the drop in Livetech's long position.| Take Two vs. Technos SA | Take Two vs. Palantir Technologies | Take Two vs. Deutsche Bank Aktiengesellschaft | Take Two vs. Align Technology |
| Livetech vs. METISA Metalrgica Timboense | Livetech vs. Paycom Software | Livetech vs. Automatic Data Processing | Livetech vs. Unity 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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