Correlation Between Pettenati and Take Two

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

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

Diversification Opportunities for Pettenati and Take Two

-0.71

Correlation Coefficient

Pettenati  Take Two

Pay attention - limited upside

The 3 months correlation between Pettenati and Take is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Pettenati SA Industria 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 Pettenati 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 Pettenati SA Industria 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 Pettenati i.e., Pettenati and Take Two go up and down completely randomly.

Pair Corralation between Pettenati and Take Two

Assuming the 90 days trading horizon Pettenati SA Industria is expected to under-perform the Take Two. In addition to that, Pettenati is 1.31 times more volatile than Take Two Interactive Software. It trades about -0.04 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.12 per unit of volatility. If you would invest  21,651  in Take Two Interactive Software on September 26, 2024 and sell it today you would earn a total of  6,545  from holding Take Two Interactive Software or generate 30.23% return on investment over 90 days.

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

Pettenati SA Industria  vs.  Take Two Interactive Software

Pettenati SA Industria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pettenati SA Industria has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm 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 somewhat weak basic indicators, Take Two sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pettenati and Take Two

The main advantage of trading using opposite Pettenati and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pettenati 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 Pettenati SA Industria 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.