Correlation Between Take Two and Nintendo
Can any of the company-specific risk be diversified away by investing in both Take Two and Nintendo 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 Nintendo 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 Nintendo Co, you can compare the effects of market volatilities on Take Two and Nintendo 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 Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Nintendo.
Diversification Opportunities for Take Two and Nintendo
Good diversification
The 3 months correlation between Take and Nintendo is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Nintendo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nintendo 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 Nintendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nintendo has no effect on the direction of Take Two i.e., Take Two and Nintendo go up and down completely randomly.
Pair Corralation between Take Two and Nintendo
Given the investment horizon of 90 days Take Two Interactive Software is expected to generate 0.61 times more return on investment than Nintendo. However, Take Two Interactive Software is 1.63 times less risky than Nintendo. It trades about 0.41 of its potential returns per unit of risk. Nintendo Co is currently generating about -0.02 per unit of risk. If you would invest 16,075 in Take Two Interactive Software on August 27, 2024 and sell it today you would earn a total of 2,740 from holding Take Two Interactive Software or generate 17.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Take Two Interactive Software vs. Nintendo Co
Performance |
| Timeline |
| Take Two Interactive |
| Nintendo |
Take Two and Nintendo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Nintendo
The main advantage of trading using opposite Take Two and Nintendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Nintendo 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 Nintendo will offset losses from the drop in Nintendo's long position.| Take Two vs. Playstudios | Take Two vs. Talkspace | Take Two vs. Katapult Holdings Equity | Take Two vs. Aquagold International |
| Nintendo vs. Take Two Interactive Software | Nintendo vs. Electronic Arts | Nintendo vs. UbiSoft Entertainment | Nintendo vs. Square Enix Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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