Correlation Between Take-Two Interactive and CIA ENGER

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

Diversification Opportunities for Take-Two Interactive and CIA ENGER

0.38

Correlation Coefficient

Take-Two Interactive  CIA ENGER

Weak diversification

The 3 months correlation between Take-Two and CIA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and CIA ENGER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIA ENGER ADR and Take-Two Interactive 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 CIA ENGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIA ENGER ADR has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and CIA ENGER go up and down completely randomly.

Pair Corralation between Take-Two Interactive and CIA ENGER

Assuming the 90 days horizon Take Two Interactive Software is expected to generate 13.02 times more return on investment than CIA ENGER. However, Take-Two Interactive is 13.02 times more volatile than CIA ENGER ADR. It trades about 0.07 of its potential returns per unit of risk. CIA ENGER ADR is currently generating about 0.13 per unit of risk. If you would invest  17,432  in Take Two Interactive Software on December 20, 2024 and sell it today you would earn a total of  1,394  from holding Take Two Interactive Software or generate 8.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Take Two Interactive Software  vs.  CIA ENGER ADR

Take Two Interactive

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Take-Two Interactive may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CIA ENGER ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CIA ENGER ADR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, CIA ENGER is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Take-Two Interactive and CIA ENGER

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

The idea behind Take Two Interactive Software and CIA ENGER ADR 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.