Correlation Between Take Two and Alstria Office

Can any of the company-specific risk be diversified away by investing in both Take Two and Alstria Office 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 Alstria Office 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 alstria office REIT AG, you can compare the effects of market volatilities on Take Two and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Alstria Office.

Diversification Opportunities for Take Two and Alstria Office

0.89

Correlation Coefficient

Take Two  Alstria Office

Very poor diversification

The 3 months correlation between Take and Alstria is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of Take Two i.e., Take Two and Alstria Office go up and down completely randomly.

Pair Corralation between Take Two and Alstria Office

Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.51 times more return on investment than Alstria Office. However, Take Two Interactive Software is 1.96 times less risky than Alstria Office. It trades about 0.08 of its potential returns per unit of risk. alstria office REIT AG is currently generating about 0.04 per unit of risk. If you would invest  10,379  in Take Two Interactive Software on October 4, 2024 and sell it today you would earn a total of  8,083  from holding Take Two Interactive Software or generate 77.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.2%
Values	Daily Returns

Take Two Interactive Software  vs.  alstria office REIT AG

Take Two Interactive

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Take Two unveiled solid returns over the last few months and may actually be approaching a breakup point.

alstria office REIT

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in alstria office REIT AG are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, Alstria Office disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Take Two and Alstria Office

The main advantage of trading using opposite Take Two and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office's long position.

The idea behind Take Two Interactive Software and alstria office REIT AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.