Correlation Between Take Two and Samsung Electronics

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

Diversification Opportunities for Take Two and Samsung Electronics

-0.88

Correlation Coefficient

Take Two  Samsung Electronics

Pay attention - limited upside

The 3 months correlation between Take and Samsung is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Take Two i.e., Take Two and Samsung Electronics go up and down completely randomly.

Pair Corralation between Take Two and Samsung Electronics

Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.63 times more return on investment than Samsung Electronics. However, Take Two Interactive Software is 1.6 times less risky than Samsung Electronics. It trades about 0.14 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.19 per unit of risk. If you would invest  15,692  in Take Two Interactive Software on October 3, 2024 and sell it today you would earn a total of  2,689  from holding Take Two Interactive Software or generate 17.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.82%
Values	Daily Returns

Take Two Interactive Software  vs.  Samsung Electronics Co

Take Two Interactive

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 21 (%) 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.

Samsung Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 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 Samsung Electronics

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

The idea behind Take Two Interactive Software and Samsung Electronics Co 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .