Correlation Between Take-Two Interactive and Check Point
Can any of the company-specific risk be diversified away by investing in both Take-Two Interactive and Check Point 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 Check Point 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 Check Point Software, you can compare the effects of market volatilities on Take-Two Interactive and Check Point 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 Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take-Two Interactive and Check Point.
Diversification Opportunities for Take-Two Interactive and Check Point
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Take-Two and Check is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and Check Point go up and down completely randomly.
Pair Corralation between Take-Two Interactive and Check Point
Assuming the 90 days horizon Take Two Interactive Software is expected to generate 1.22 times more return on investment than Check Point. However, Take-Two Interactive is 1.22 times more volatile than Check Point Software. It trades about 0.07 of its potential returns per unit of risk. Check Point Software is currently generating about 0.08 per unit of risk. If you would invest 11,010 in Take Two Interactive Software on November 27, 2024 and sell it today you would earn a total of 9,080 from holding Take Two Interactive Software or generate 82.47% 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. Check Point Software
Performance |
| Timeline |
| Take Two Interactive |
| Check Point Software |
Take-Two Interactive and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take-Two Interactive and Check Point
The main advantage of trading using opposite Take-Two Interactive and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take-Two Interactive position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| Take-Two Interactive vs. H2O Retailing | Take-Two Interactive vs. LG Display Co | Take-Two Interactive vs. FAST RETAIL ADR | Take-Two Interactive vs. CanSino Biologics |
| Check Point vs. COMMERCIAL VEHICLE | Check Point vs. Playtech plc | Check Point vs. Genscript Biotech | Check Point vs. GRUPO CARSO A1 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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