Correlation Between FLOW TRADERS and Take-Two Interactive

Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS 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 FLOW TRADERS LTD and Take Two Interactive Software, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of Take-Two Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Take-Two Interactive.

Diversification Opportunities for FLOW TRADERS and Take-Two Interactive

0.58

Correlation Coefficient

FLOW TRADERS  Take-Two Interactive

Very weak diversification

The 3 months correlation between FLOW and Take-Two is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD 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 FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and Take-Two Interactive go up and down completely randomly.

Pair Corralation between FLOW TRADERS and Take-Two Interactive

Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 1.08 times more return on investment than Take-Two Interactive. However, FLOW TRADERS is 1.08 times more volatile than Take Two Interactive Software. It trades about 0.1 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about -0.14 per unit of risk. If you would invest  2,156  in FLOW TRADERS LTD on September 23, 2024 and sell it today you would earn a total of  58.00  from holding FLOW TRADERS LTD or generate 2.69% return on investment over 90 days.

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

FLOW TRADERS LTD  vs.  Take Two Interactive Software

FLOW TRADERS LTD

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FLOW TRADERS LTD are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, FLOW TRADERS reported solid returns over the last few months and may actually be approaching a breakup point.

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. Despite nearly fragile basic indicators, Take-Two Interactive reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FLOW TRADERS and Take-Two Interactive

The main advantage of trading using opposite FLOW TRADERS and Take-Two Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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 FLOW TRADERS LTD 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 Transaction History module to view history of all your transactions and understand their impact on performance.