Correlation Between Take Two and Occidental Petroleum
Can any of the company-specific risk be diversified away by investing in both Take Two and Occidental Petroleum 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 Occidental Petroleum 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 Occidental Petroleum, you can compare the effects of market volatilities on Take Two and Occidental Petroleum 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 Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Occidental Petroleum.
Diversification Opportunities for Take Two and Occidental Petroleum
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Take and Occidental is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Occidental Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum 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 Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of Take Two i.e., Take Two and Occidental Petroleum go up and down completely randomly.
Pair Corralation between Take Two and Occidental Petroleum
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 1.06 times more return on investment than Occidental Petroleum. However, Take Two is 1.06 times more volatile than Occidental Petroleum. It trades about 0.09 of its potential returns per unit of risk. Occidental Petroleum is currently generating about 0.0 per unit of risk. If you would invest 13,563 in Take Two Interactive Software on September 2, 2024 and sell it today you would earn a total of 14,779 from holding Take Two Interactive Software or generate 108.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Occidental Petroleum
Performance |
| Timeline |
| Take Two Interactive |
| Occidental Petroleum |
Take Two and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Occidental Petroleum
The main advantage of trading using opposite Take Two and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Occidental Petroleum 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum'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 |
| Occidental Petroleum vs. Align Technology | Occidental Petroleum vs. Unity Software | Occidental Petroleum vs. Take Two Interactive Software | Occidental Petroleum vs. Bemobi Mobile Tech |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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