Correlation Between Trade Desk and Take Two
Can any of the company-specific risk be diversified away by investing in both Trade Desk and Take Two 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 Trade Desk and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Trade Desk and Take Two Interactive Software, you can compare the effects of market volatilities on Trade Desk and Take Two 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 Trade Desk with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and Take Two.
Diversification Opportunities for Trade Desk and Take Two
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Trade and Take is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive and Trade Desk 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 The Trade Desk are associated (or correlated) with Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of Trade Desk i.e., Trade Desk and Take Two go up and down completely randomly.
Pair Corralation between Trade Desk and Take Two
Assuming the 90 days trading horizon Trade Desk is expected to generate 1.8 times less return on investment than Take Two. In addition to that, Trade Desk is 1.57 times more volatile than Take Two Interactive Software. It trades about 0.15 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.43 per unit of volatility. If you would invest 23,345 in Take Two Interactive Software on August 30, 2024 and sell it today you would earn a total of 4,187 from holding Take Two Interactive Software or generate 17.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Trade Desk vs. Take Two Interactive Software
Performance |
| Timeline |
| Trade Desk |
| Take Two Interactive |
Trade Desk and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Desk and Take Two
The main advantage of trading using opposite Trade Desk and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk position performs unexpectedly, Take Two 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 Take Two will offset losses from the drop in Take Two's long position.| Trade Desk vs. Metalurgica Gerdau SA | Trade Desk vs. Ameriprise Financial | Trade Desk vs. TAL Education Group | Trade Desk vs. Mitsubishi UFJ Financial |
| Take Two vs. Bread Financial Holdings | Take Two vs. The Trade Desk | Take Two vs. Tyson Foods | Take Two vs. Deutsche Bank Aktiengesellschaft |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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