Correlation Between Take Two and ZoomInfo Technologies

Can any of the company-specific risk be diversified away by investing in both Take Two and ZoomInfo Technologies 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 ZoomInfo Technologies 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 ZoomInfo Technologies, you can compare the effects of market volatilities on Take Two and ZoomInfo Technologies 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 ZoomInfo Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and ZoomInfo Technologies.

Diversification Opportunities for Take Two and ZoomInfo Technologies

0.71

Correlation Coefficient

Take Two  ZoomInfo Technologies

Poor diversification

The 3 months correlation between Take and ZoomInfo is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and ZoomInfo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZoomInfo Technologies 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 ZoomInfo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZoomInfo Technologies has no effect on the direction of Take Two i.e., Take Two and ZoomInfo Technologies go up and down completely randomly.

Pair Corralation between Take Two and ZoomInfo Technologies

Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.66 times more return on investment than ZoomInfo Technologies. However, Take Two Interactive Software is 1.52 times less risky than ZoomInfo Technologies. It trades about 0.07 of its potential returns per unit of risk. ZoomInfo Technologies is currently generating about -0.03 per unit of risk. If you would invest  20,580  in Take Two Interactive Software on October 24, 2024 and sell it today you would earn a total of  7,134  from holding Take Two Interactive Software or generate 34.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.58%
Values	Daily Returns

Take Two Interactive Software  vs.  ZoomInfo Technologies

Take Two Interactive

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 12 (%) 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.

ZoomInfo Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZoomInfo Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, ZoomInfo Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Take Two and ZoomInfo Technologies

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

The idea behind Take Two Interactive Software and ZoomInfo Technologies 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.