Correlation Between Take-Two Interactive and URBAN OUTFITTERS
Can any of the company-specific risk be diversified away by investing in both Take-Two Interactive and URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS, you can compare the effects of market volatilities on Take-Two Interactive and URBAN OUTFITTERS 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 URBAN OUTFITTERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take-Two Interactive and URBAN OUTFITTERS.
Diversification Opportunities for Take-Two Interactive and URBAN OUTFITTERS
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Take-Two and URBAN is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and URBAN OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on URBAN OUTFITTERS 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 URBAN OUTFITTERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of URBAN OUTFITTERS has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and URBAN OUTFITTERS go up and down completely randomly.
Pair Corralation between Take-Two Interactive and URBAN OUTFITTERS
Assuming the 90 days horizon Take-Two Interactive is expected to generate 2.34 times less return on investment than URBAN OUTFITTERS. But when comparing it to its historical volatility, Take Two Interactive Software is 1.6 times less risky than URBAN OUTFITTERS. It trades about 0.04 of its potential returns per unit of risk. URBAN OUTFITTERS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,840 in URBAN OUTFITTERS on November 4, 2024 and sell it today you would earn a total of 1,460 from holding URBAN OUTFITTERS or generate 38.02% 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. URBAN OUTFITTERS
Performance |
| Timeline |
| Take Two Interactive |
| URBAN OUTFITTERS |
Take-Two Interactive and URBAN OUTFITTERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take-Two Interactive and URBAN OUTFITTERS
The main advantage of trading using opposite Take-Two Interactive and URBAN OUTFITTERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take-Two Interactive position performs unexpectedly, URBAN OUTFITTERS 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 URBAN OUTFITTERS will offset losses from the drop in URBAN OUTFITTERS's long position.| Take-Two Interactive vs. Nintendo Co | Take-Two Interactive vs. Nintendo Co | Take-Two Interactive vs. Sea Limited | Take-Two Interactive vs. Electronic Arts |
| URBAN OUTFITTERS vs. MACOM Technology Solutions | URBAN OUTFITTERS vs. Easy Software AG | URBAN OUTFITTERS vs. UPDATE SOFTWARE | URBAN OUTFITTERS vs. ASURE SOFTWARE |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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