Correlation Between Take Two and Integrated Diagnostics

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

Diversification Opportunities for Take Two and Integrated Diagnostics

-0.61

Correlation Coefficient

Take Two  Integrated Diagnostics

Excellent diversification

The 3 months correlation between Take and Integrated is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Integrated Diagnostics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Diagnostics 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 Integrated Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Diagnostics has no effect on the direction of Take Two i.e., Take Two and Integrated Diagnostics go up and down completely randomly.

Pair Corralation between Take Two and Integrated Diagnostics

Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.68 times more return on investment than Integrated Diagnostics. However, Take Two Interactive Software is 1.48 times less risky than Integrated Diagnostics. It trades about 0.11 of its potential returns per unit of risk. Integrated Diagnostics Holdings is currently generating about -0.13 per unit of risk. If you would invest  18,534  in Take Two Interactive Software on December 24, 2024 and sell it today you would earn a total of  2,906  from holding Take Two Interactive Software or generate 15.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Take Two Interactive Software  vs.  Integrated Diagnostics Holding

Take Two Interactive

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 8 (%) 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.

Integrated Diagnostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integrated Diagnostics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Take Two and Integrated Diagnostics

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

The idea behind Take Two Interactive Software and Integrated Diagnostics Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.