Correlation Between Take-Two Interactive and GEA GROUP
Can any of the company-specific risk be diversified away by investing in both Take-Two Interactive and GEA 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 Interactive and GEA 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 GEA GROUP, you can compare the effects of market volatilities on Take-Two Interactive and GEA 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 Interactive with a short position of GEA GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take-Two Interactive and GEA GROUP.
Diversification Opportunities for Take-Two Interactive and GEA GROUP
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Take-Two and GEA is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and GEA GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEA GROUP 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 GEA GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEA GROUP has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and GEA GROUP go up and down completely randomly.
Pair Corralation between Take-Two Interactive and GEA GROUP
Assuming the 90 days horizon Take-Two Interactive is expected to generate 1.14 times less return on investment than GEA GROUP. In addition to that, Take-Two Interactive is 2.06 times more volatile than GEA GROUP. It trades about 0.1 of its total potential returns per unit of risk. GEA GROUP is currently generating about 0.23 per unit of volatility. If you would invest 4,734 in GEA GROUP on December 2, 2024 and sell it today you would earn a total of 791.00 from holding GEA GROUP or generate 16.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Take Two Interactive Software vs. GEA GROUP
Performance |
Timeline |
Take Two Interactive |
GEA GROUP |
Take-Two Interactive and GEA GROUP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Take-Two Interactive and GEA GROUP
The main advantage of trading using opposite Take-Two Interactive and GEA GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take-Two Interactive position performs unexpectedly, GEA 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 GEA GROUP will offset losses from the drop in GEA GROUP's long position.Take-Two Interactive vs. Guidewire Software | Take-Two Interactive vs. Kingdee International Software | Take-Two Interactive vs. NetSol Technologies | Take-Two Interactive vs. AXWAY SOFTWARE EO |
GEA GROUP vs. BOSTON BEER A | GEA GROUP vs. China Resources Beer | GEA GROUP vs. Solstad Offshore ASA | GEA GROUP vs. Discover Financial Services |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |