Correlation Between Axfood AB and Take-Two Interactive

Can any of the company-specific risk be diversified away by investing in both Axfood AB and Take-Two Interactive 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 Axfood AB and Take-Two Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Axfood AB and Take Two Interactive Software, you can compare the effects of market volatilities on Axfood AB and Take-Two Interactive 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 Axfood AB with a short position of Take-Two Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Take-Two Interactive.

Diversification Opportunities for Axfood AB and Take-Two Interactive

0.16

Correlation Coefficient

Axfood AB  Take-Two Interactive

Average diversification

The 3 months correlation between Axfood and Take-Two is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive and Axfood AB 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 Axfood AB are associated (or correlated) with Take-Two Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of Axfood AB i.e., Axfood AB and Take-Two Interactive go up and down completely randomly.

Pair Corralation between Axfood AB and Take-Two Interactive

Assuming the 90 days trading horizon Axfood AB is expected to generate 10.02 times less return on investment than Take-Two Interactive. But when comparing it to its historical volatility, Axfood AB is 2.64 times less risky than Take-Two Interactive. It trades about 0.03 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  18,450  in Take Two Interactive Software on November 20, 2024 and sell it today you would earn a total of  2,600  from holding Take Two Interactive Software or generate 14.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Axfood AB  vs.  Take Two Interactive Software

Axfood AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Axfood AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Axfood AB is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 unsteady basic indicators, Take-Two Interactive unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axfood AB and Take-Two Interactive

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

The idea behind Axfood AB and Take Two Interactive Software 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.