Correlation Between Take-Two Interactive and Casella Waste
Can any of the company-specific risk be diversified away by investing in both Take-Two Interactive and Casella Waste 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 Casella Waste 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 Casella Waste Systems, you can compare the effects of market volatilities on Take-Two Interactive and Casella Waste 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 Casella Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take-Two Interactive and Casella Waste.
Diversification Opportunities for Take-Two Interactive and Casella Waste
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Take-Two and Casella is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Casella Waste Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casella Waste 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 Casella Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casella Waste Systems has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and Casella Waste go up and down completely randomly.
Pair Corralation between Take-Two Interactive and Casella Waste
Assuming the 90 days horizon Take-Two Interactive is expected to generate 1.14 times less return on investment than Casella Waste. In addition to that, Take-Two Interactive is 1.06 times more volatile than Casella Waste Systems. It trades about 0.08 of its total potential returns per unit of risk. Casella Waste Systems is currently generating about 0.09 per unit of volatility. If you would invest 9,000 in Casella Waste Systems on September 3, 2024 and sell it today you would earn a total of 1,680 from holding Casella Waste Systems or generate 18.67% 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. Casella Waste Systems
Performance |
| Timeline |
| Take Two Interactive |
| Casella Waste Systems |
Take-Two Interactive and Casella Waste Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take-Two Interactive and Casella Waste
The main advantage of trading using opposite Take-Two Interactive and Casella Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take-Two Interactive position performs unexpectedly, Casella Waste 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 Casella Waste will offset losses from the drop in Casella Waste's long position.| Take-Two Interactive vs. Sumitomo Rubber Industries | Take-Two Interactive vs. SANOK RUBBER ZY | Take-Two Interactive vs. Eagle Materials | Take-Two Interactive vs. Harmony Gold Mining |
| Casella Waste vs. Waste Management | Casella Waste vs. Republic Services | Casella Waste vs. Waste Connections | Casella Waste vs. Veolia Environnement SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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