Correlation Between Take Two and Thermo Fisher

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

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

Diversification Opportunities for Take Two and Thermo Fisher

-0.39

Correlation Coefficient

Take Two  Thermo Fisher

Very good diversification

The 3 months correlation between Take and Thermo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Thermo Fisher Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermo Fisher Scientific and Take Two 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 Take Two Interactive Software are associated (or correlated) with Thermo Fisher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermo Fisher Scientific has no effect on the direction of Take Two i.e., Take Two and Thermo Fisher go up and down completely randomly.

Pair Corralation between Take Two and Thermo Fisher

Assuming the 90 days trading horizon Take Two Interactive Software is expected to under-perform the Thermo Fisher. In addition to that, Take Two is 1.15 times more volatile than Thermo Fisher Scientific. It trades about -0.05 of its total potential returns per unit of risk. Thermo Fisher Scientific is currently generating about 0.05 per unit of volatility. If you would invest  6,808  in Thermo Fisher Scientific on October 10, 2024 and sell it today you would earn a total of  116.00  from holding Thermo Fisher Scientific or generate 1.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Take Two Interactive Software  vs.  Thermo Fisher Scientific

Take Two Interactive

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Take Two sustained solid returns over the last few months and may actually be approaching a breakup point.

Thermo Fisher Scientific

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thermo Fisher Scientific are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Thermo Fisher is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Take Two and Thermo Fisher

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

The idea behind Take Two Interactive Software and Thermo Fisher Scientific 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.