Correlation Between Take Two and Sellas Life
Can any of the company-specific risk be diversified away by investing in both Take Two and Sellas Life 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 Sellas Life 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 Sellas Life Sciences, you can compare the effects of market volatilities on Take Two and Sellas Life 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 Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Sellas Life.
Diversification Opportunities for Take Two and Sellas Life
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Take and Sellas is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences 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 Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of Take Two i.e., Take Two and Sellas Life go up and down completely randomly.
Pair Corralation between Take Two and Sellas Life
Given the investment horizon of 90 days Take Two is expected to generate 33.29 times less return on investment than Sellas Life. But when comparing it to its historical volatility, Take Two Interactive Software is 6.72 times less risky than Sellas Life. It trades about 0.05 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Sellas Life Sciences on November 3, 2024 and sell it today you would earn a total of 55.00 from holding Sellas Life Sciences or generate 51.4% 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. Sellas Life Sciences
Performance |
| Timeline |
| Take Two Interactive |
| Sellas Life Sciences |
Take Two and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Take Two and Sellas Life
The main advantage of trading using opposite Take Two and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life's long position.| Take Two vs. Nintendo Co ADR | Take Two vs. NetEase | Take Two vs. Playtika Holding Corp | Take Two vs. Electronic Arts |
| Sellas Life vs. NLS Pharmaceutics AG | Sellas Life vs. Mereo BioPharma Group | Sellas Life vs. Day One Biopharmaceuticals | Sellas Life vs. Reviva Pharmaceuticals 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 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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