Correlation Between Take Two and Trade Desk
Can any of the company-specific risk be diversified away by investing in both Take Two and Trade Desk 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 Trade Desk 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 The Trade Desk, you can compare the effects of market volatilities on Take Two and Trade Desk 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 Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Trade Desk.
Diversification Opportunities for Take Two and Trade Desk
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Take and Trade is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk 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 Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of Take Two i.e., Take Two and Trade Desk go up and down completely randomly.
Pair Corralation between Take Two and Trade Desk
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.62 times more return on investment than Trade Desk. However, Take Two Interactive Software is 1.6 times less risky than Trade Desk. It trades about 0.47 of its potential returns per unit of risk. The Trade Desk is currently generating about 0.17 per unit of risk. If you would invest 23,023 in Take Two Interactive Software on August 27, 2024 and sell it today you would earn a total of 4,330 from holding Take Two Interactive Software or generate 18.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. The Trade Desk
Performance |
| Timeline |
| Take Two Interactive |
| Trade Desk |
Take Two and Trade Desk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Trade Desk
The main advantage of trading using opposite Take Two and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Trade Desk 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 Trade Desk will offset losses from the drop in Trade Desk's long position.| Take Two vs. Deutsche Bank Aktiengesellschaft | Take Two vs. Verizon Communications | Take Two vs. GP Investments | Take Two vs. Charter Communications |
| Trade Desk vs. BIONTECH SE DRN | Trade Desk vs. Take Two Interactive Software | Trade Desk vs. Spotify Technology SA | Trade Desk vs. Mangels Industrial SA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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