Correlation Between CHINA TONTINE and Take Two

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

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

Diversification Opportunities for CHINA TONTINE and Take Two

0.0

Correlation Coefficient

CHINA TONTINE  Take Two

Pay attention - limited upside

The 3 months correlation between CHINA and Take is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES 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 CHINA TONTINE 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 CHINA TONTINE WINES 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 CHINA TONTINE i.e., CHINA TONTINE and Take Two go up and down completely randomly.

Pair Corralation between CHINA TONTINE and Take Two

If you would invest  15,500  in Take Two Interactive Software on October 7, 2024 and sell it today you would earn a total of  2,624  from holding Take Two Interactive Software or generate 16.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.44%
Values	Daily Returns

CHINA TONTINE WINES  vs.  Take Two Interactive Software

CHINA TONTINE WINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHINA TONTINE WINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, CHINA TONTINE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Take Two Interactive

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Take Two reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHINA TONTINE and Take Two

The main advantage of trading using opposite CHINA TONTINE and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE 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 CHINA TONTINE WINES 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.