Correlation Between Take Two and Fortum Oyj
Can any of the company-specific risk be diversified away by investing in both Take Two and Fortum Oyj 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 Fortum Oyj 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 Fortum Oyj ADR, you can compare the effects of market volatilities on Take Two and Fortum Oyj 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 Fortum Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Fortum Oyj.
Diversification Opportunities for Take Two and Fortum Oyj
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Take and Fortum is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Fortum Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj ADR 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 Fortum Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortum Oyj ADR has no effect on the direction of Take Two i.e., Take Two and Fortum Oyj go up and down completely randomly.
Pair Corralation between Take Two and Fortum Oyj
Given the investment horizon of 90 days Take Two Interactive Software is expected to generate 0.85 times more return on investment than Fortum Oyj. However, Take Two Interactive Software is 1.17 times less risky than Fortum Oyj. It trades about 0.09 of its potential returns per unit of risk. Fortum Oyj ADR is currently generating about 0.01 per unit of risk. If you would invest 9,949 in Take Two Interactive Software on August 28, 2024 and sell it today you would earn a total of 8,813 from holding Take Two Interactive Software or generate 88.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Fortum Oyj ADR
Performance |
| Timeline |
| Take Two Interactive |
| Fortum Oyj ADR |
Take Two and Fortum Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Fortum Oyj
The main advantage of trading using opposite Take Two and Fortum Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Fortum Oyj 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 Fortum Oyj will offset losses from the drop in Fortum Oyj's long position.| Take Two vs. Nintendo Co ADR | Take Two vs. NetEase | Take Two vs. Playtika Holding Corp | Take Two vs. Electronic Arts |
| Fortum Oyj vs. Constellation Energy Corp | Fortum Oyj vs. Astra Energy | Fortum Oyj vs. Powertap Hydrogen Capital | Fortum Oyj vs. Brenmiller Energy Ltd |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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