Correlation Between Take-Two Interactive and Hercules Capital
Can any of the company-specific risk be diversified away by investing in both Take-Two Interactive and Hercules Capital 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 Interactive and Hercules Capital 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 Hercules Capital, you can compare the effects of market volatilities on Take-Two Interactive and Hercules Capital 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 Interactive with a short position of Hercules Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take-Two Interactive and Hercules Capital.
Diversification Opportunities for Take-Two Interactive and Hercules Capital
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Take-Two and Hercules is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital and Take-Two Interactive 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 Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and Hercules Capital go up and down completely randomly.
Pair Corralation between Take-Two Interactive and Hercules Capital
Assuming the 90 days horizon Take Two Interactive Software is expected to generate 1.0 times more return on investment than Hercules Capital. However, Take-Two Interactive is 1.0 times more volatile than Hercules Capital. It trades about 0.08 of its potential returns per unit of risk. Hercules Capital is currently generating about 0.07 per unit of risk. If you would invest 9,727 in Take Two Interactive Software on October 13, 2024 and sell it today you would earn a total of 8,177 from holding Take Two Interactive Software or generate 84.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Take Two Interactive Software vs. Hercules Capital
Performance |
| Timeline |
| Take Two Interactive |
| Hercules Capital |
Take-Two Interactive and Hercules Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take-Two Interactive and Hercules Capital
The main advantage of trading using opposite Take-Two Interactive and Hercules Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take-Two Interactive position performs unexpectedly, Hercules Capital 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 Hercules Capital will offset losses from the drop in Hercules Capital's long position.| Take-Two Interactive vs. JAPAN AIRLINES | Take-Two Interactive vs. ETFS Coffee ETC | Take-Two Interactive vs. China Eastern Airlines | Take-Two Interactive vs. Gol Intelligent Airlines |
| Hercules Capital vs. SALESFORCE INC CDR | Hercules Capital vs. ASURE SOFTWARE | Hercules Capital vs. Take Two Interactive Software | Hercules Capital vs. AXWAY SOFTWARE EO |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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