Correlation Between Take Two and LABYRINTH RESOURCES

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

Diversification Opportunities for Take Two and LABYRINTH RESOURCES

0.24

Correlation Coefficient

Take Two  LABYRINTH RESOURCES

Modest diversification

The 3 months correlation between Take and LABYRINTH is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and LABYRINTH RESOURCES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LABYRINTH RESOURCES LTD 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 LABYRINTH RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LABYRINTH RESOURCES LTD has no effect on the direction of Take Two i.e., Take Two and LABYRINTH RESOURCES go up and down completely randomly.

Pair Corralation between Take Two and LABYRINTH RESOURCES

If you would invest  14,944  in Take Two Interactive Software on October 6, 2024 and sell it today you would earn a total of  3,180  from holding Take Two Interactive Software or generate 21.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Take Two Interactive Software  vs.  LABYRINTH RESOURCES LTD

Take Two Interactive

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Take Two reported solid returns over the last few months and may actually be approaching a breakup point.

LABYRINTH RESOURCES LTD

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LABYRINTH RESOURCES LTD are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, LABYRINTH RESOURCES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Take Two and LABYRINTH RESOURCES

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

The idea behind Take Two Interactive Software and LABYRINTH RESOURCES LTD 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 Global Correlations module to find global opportunities by holding instruments from different markets.