Correlation Between Mobile Global and Take Two

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

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

Diversification Opportunities for Mobile Global and Take Two

-0.63

Correlation Coefficient

Mobile Global  Take Two

Excellent diversification

The 3 months correlation between Mobile and Take is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Global Esports 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 Mobile Global 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 Mobile Global Esports 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 Mobile Global i.e., Mobile Global and Take Two go up and down completely randomly.

Pair Corralation between Mobile Global and Take Two

If you would invest  15,361  in Take Two Interactive Software on September 12, 2024 and sell it today you would earn a total of  3,175  from holding Take Two Interactive Software or generate 20.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Mobile Global Esports  vs.  Take Two Interactive Software

Mobile Global Esports

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mobile Global Esports has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Mobile Global is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the 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 very inconsistent basic indicators, Take Two displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mobile Global and Take Two

The main advantage of trading using opposite Mobile Global and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Global 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 Mobile Global Esports 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .