Correlation Between Take Two and BHP Group
Can any of the company-specific risk be diversified away by investing in both Take Two and BHP Group 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 BHP Group 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 BHP Group Limited, you can compare the effects of market volatilities on Take Two and BHP Group 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 BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and BHP Group.
Diversification Opportunities for Take Two and BHP Group
Pay attention - limited upside
The 3 months correlation between Take and BHP is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and BHP Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP Group Limited 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 BHP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP Group Limited has no effect on the direction of Take Two i.e., Take Two and BHP Group go up and down completely randomly.
Pair Corralation between Take Two and BHP Group
Assuming the 90 days horizon Take Two Interactive Software is expected to generate 1.19 times more return on investment than BHP Group. However, Take Two is 1.19 times more volatile than BHP Group Limited. It trades about 0.16 of its potential returns per unit of risk. BHP Group Limited is currently generating about 0.19 per unit of risk. If you would invest 17,512 in Take Two Interactive Software on October 22, 2024 and sell it today you would earn a total of 636.00 from holding Take Two Interactive Software or generate 3.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Take Two Interactive Software vs. BHP Group Limited
Performance |
Timeline |
Take Two Interactive |
BHP Group Limited |
Take Two and BHP Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Take Two and BHP Group
The main advantage of trading using opposite Take Two and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, BHP Group 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 BHP Group will offset losses from the drop in BHP Group's long position.Take Two vs. Wyndham Hotels Resorts | Take Two vs. NH HOTEL GROUP | Take Two vs. ARDAGH METAL PACDL 0001 | Take Two vs. HYATT HOTELS A |
BHP Group vs. Fuji Media Holdings | BHP Group vs. American Airlines Group | BHP Group vs. TOWNSQUARE MEDIA INC | BHP Group vs. PENN Entertainment |
Check out your portfolio center.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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