Correlation Between Albion Technology and Take Two

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

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

Diversification Opportunities for Albion Technology and Take Two

-0.42

Correlation Coefficient

Albion Technology  Take Two

Very good diversification

The 3 months correlation between Albion and Take is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General 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 Albion Technology 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 Albion Technology General are associated (or correlated) with Take Two. 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 Albion Technology i.e., Albion Technology and Take Two go up and down completely randomly.

Pair Corralation between Albion Technology and Take Two

Assuming the 90 days trading horizon Albion Technology General is expected to generate 0.6 times more return on investment than Take Two. However, Albion Technology General is 1.67 times less risky than Take Two. It trades about -0.05 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about -0.06 per unit of risk. If you would invest  6,850  in Albion Technology General on September 27, 2024 and sell it today you would lose (50.00) from holding Albion Technology General or give up 0.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Albion Technology General  vs.  Take Two Interactive Software

Albion Technology General

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Albion Technology General has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Albion Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Take Two Interactive

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 17 (%) 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.

Pair Trading with Albion Technology and Take Two

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

The idea behind Albion Technology General 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.