Correlation Between Take-Two Interactive and Cisco Systems
Can any of the company-specific risk be diversified away by investing in both Take-Two Interactive and Cisco Systems 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 Cisco Systems 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 Cisco Systems, you can compare the effects of market volatilities on Take-Two Interactive and Cisco Systems 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 Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take-Two Interactive and Cisco Systems.
Diversification Opportunities for Take-Two Interactive and Cisco Systems
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Take-Two and Cisco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems 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 Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and Cisco Systems go up and down completely randomly.
Pair Corralation between Take-Two Interactive and Cisco Systems
Assuming the 90 days horizon Take Two Interactive Software is expected to generate 1.11 times more return on investment than Cisco Systems. However, Take-Two Interactive is 1.11 times more volatile than Cisco Systems. It trades about 0.24 of its potential returns per unit of risk. Cisco Systems is currently generating about 0.11 per unit of risk. If you would invest 16,768 in Take Two Interactive Software on September 12, 2024 and sell it today you would earn a total of 826.00 from holding Take Two Interactive Software or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Cisco Systems
Performance |
| Timeline |
| Take Two Interactive |
| Cisco Systems |
Take-Two Interactive and Cisco Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take-Two Interactive and Cisco Systems
The main advantage of trading using opposite Take-Two Interactive and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take-Two Interactive position performs unexpectedly, Cisco Systems 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 Cisco Systems will offset losses from the drop in Cisco Systems' long position.| Take-Two Interactive vs. NEXON Co | Take-Two Interactive vs. Superior Plus Corp | Take-Two Interactive vs. SIVERS SEMICONDUCTORS AB | Take-Two Interactive vs. Norsk Hydro ASA |
| Cisco Systems vs. Cisco Systems | Cisco Systems vs. Nokia | Cisco Systems vs. Hewlett Packard Enterprise | Cisco Systems vs. Superior Plus Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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