Correlation Between Take-Two Interactive and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Take-Two Interactive and Park Hotels 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 Park Hotels 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 Park Hotels Resorts, you can compare the effects of market volatilities on Take-Two Interactive and Park Hotels 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 Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take-Two Interactive and Park Hotels.
Diversification Opportunities for Take-Two Interactive and Park Hotels
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Take-Two and Park is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and Park Hotels go up and down completely randomly.
Pair Corralation between Take-Two Interactive and Park Hotels
Assuming the 90 days horizon Take Two Interactive Software is expected to generate 0.77 times more return on investment than Park Hotels. However, Take Two Interactive Software is 1.3 times less risky than Park Hotels. It trades about 0.07 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.03 per unit of risk. If you would invest 10,330 in Take Two Interactive Software on October 16, 2024 and sell it today you would earn a total of 7,246 from holding Take Two Interactive Software or generate 70.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Park Hotels Resorts
Performance |
| Timeline |
| Take Two Interactive |
| Park Hotels Resorts |
Take-Two Interactive and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take-Two Interactive and Park Hotels
The main advantage of trading using opposite Take-Two Interactive and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take-Two Interactive position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| Take-Two Interactive vs. Cincinnati Financial Corp | Take-Two Interactive vs. Ribbon Communications | Take-Two Interactive vs. REVO INSURANCE SPA | Take-Two Interactive vs. Highlight Communications AG |
| Park Hotels vs. Sunny Optical Technology | Park Hotels vs. UPDATE SOFTWARE | Park Hotels vs. Take Two Interactive Software | Park Hotels vs. Firan Technology Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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