Correlation Between Take Two and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Take Two and Electronic Arts 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 and Electronic Arts 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 Electronic Arts, you can compare the effects of market volatilities on Take Two and Electronic Arts 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 with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Electronic Arts.
Diversification Opportunities for Take Two and Electronic Arts
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Take and Electronic is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Take Two 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 Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of Take Two i.e., Take Two and Electronic Arts go up and down completely randomly.
Pair Corralation between Take Two and Electronic Arts
Given the investment horizon of 90 days Take Two Interactive Software is expected to generate 1.38 times more return on investment than Electronic Arts. However, Take Two is 1.38 times more volatile than Electronic Arts. It trades about 0.07 of its potential returns per unit of risk. Electronic Arts is currently generating about 0.05 per unit of risk. If you would invest 10,876 in Take Two Interactive Software on August 23, 2024 and sell it today you would earn a total of 7,674 from holding Take Two Interactive Software or generate 70.56% 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. Electronic Arts
Performance |
| Timeline |
| Take Two Interactive |
| Electronic Arts |
Take Two and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Electronic Arts
The main advantage of trading using opposite Take Two and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' long position.| Take Two vs. Nintendo Co ADR | Take Two vs. NetEase | Take Two vs. Playtika Holding Corp | Take Two vs. Electronic Arts |
| Electronic Arts vs. Nintendo Co ADR | Electronic Arts vs. Roblox Corp | Electronic Arts vs. NetEase | Electronic Arts vs. Take Two Interactive 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |