Correlation Between Take Two and 4Imprint Group

Can any of the company-specific risk be diversified away by investing in both Take Two and 4Imprint Group 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 4Imprint Group 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 4Imprint Group Plc, you can compare the effects of market volatilities on Take Two and 4Imprint Group 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 4Imprint Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and 4Imprint Group.

Diversification Opportunities for Take Two and 4Imprint Group

-0.26

Correlation Coefficient

Take Two  4Imprint Group

Very good diversification

The 3 months correlation between Take and 4Imprint is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and 4Imprint Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Imprint Group Plc 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 4Imprint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Imprint Group Plc has no effect on the direction of Take Two i.e., Take Two and 4Imprint Group go up and down completely randomly.

Pair Corralation between Take Two and 4Imprint Group

Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.69 times more return on investment than 4Imprint Group. However, Take Two Interactive Software is 1.46 times less risky than 4Imprint Group. It trades about 0.24 of its potential returns per unit of risk. 4Imprint Group Plc is currently generating about -0.07 per unit of risk. If you would invest  15,449  in Take Two Interactive Software on October 9, 2024 and sell it today you would earn a total of  3,427  from holding Take Two Interactive Software or generate 22.18% 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.  4Imprint Group Plc

Take Two Interactive

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 18 (%) 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.

4Imprint Group Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 4Imprint Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Take Two and 4Imprint Group

The main advantage of trading using opposite Take Two and 4Imprint Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, 4Imprint Group 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 4Imprint Group will offset losses from the drop in 4Imprint Group's long position.

The idea behind Take Two Interactive Software and 4Imprint Group Plc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.