Correlation Between Take Two and Mitie Group
Can any of the company-specific risk be diversified away by investing in both Take Two and Mitie 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 Mitie 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 Mitie Group PLC, you can compare the effects of market volatilities on Take Two and Mitie 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 Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Mitie Group.
Diversification Opportunities for Take Two and Mitie Group
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Take and Mitie is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Mitie Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitie 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 Mitie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitie Group PLC has no effect on the direction of Take Two i.e., Take Two and Mitie Group go up and down completely randomly.
Pair Corralation between Take Two and Mitie Group
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 1.93 times more return on investment than Mitie Group. However, Take Two is 1.93 times more volatile than Mitie Group PLC. It trades about 0.08 of its potential returns per unit of risk. Mitie Group PLC is currently generating about 0.11 per unit of risk. If you would invest 18,804 in Take Two Interactive Software on December 2, 2024 and sell it today you would earn a total of 2,108 from holding Take Two Interactive Software or generate 11.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
Take Two Interactive Software vs. Mitie Group PLC
Performance |
Timeline |
Take Two Interactive |
Mitie Group PLC |
Take Two and Mitie Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Take Two and Mitie Group
The main advantage of trading using opposite Take Two and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Mitie 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 Mitie Group will offset losses from the drop in Mitie Group's long position.Take Two vs. UNIQA Insurance Group | Take Two vs. Ebro Foods | Take Two vs. JLEN Environmental Assets | Take Two vs. Ecclesiastical Insurance Office |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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