Correlation Between Take-Two Interactive and First Quantum

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

Diversification Opportunities for Take-Two Interactive and First Quantum

0.44

Correlation Coefficient

Take-Two Interactive  First Quantum

Very weak diversification

The 3 months correlation between Take-Two and First is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals 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 First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and First Quantum go up and down completely randomly.

Pair Corralation between Take-Two Interactive and First Quantum

Assuming the 90 days horizon Take Two Interactive Software is expected to generate 0.48 times more return on investment than First Quantum. However, Take Two Interactive Software is 2.09 times less risky than First Quantum. It trades about 0.09 of its potential returns per unit of risk. First Quantum Minerals is currently generating about -0.14 per unit of risk. If you would invest  17,786  in Take Two Interactive Software on October 9, 2024 and sell it today you would earn a total of  338.00  from holding Take Two Interactive Software or generate 1.9% return on investment over 90 days.

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

Take Two Interactive Software  vs.  First Quantum Minerals

Take Two Interactive

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Take-Two Interactive reported solid returns over the last few months and may actually be approaching a breakup point.

First Quantum Minerals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Quantum Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, First Quantum may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Take-Two Interactive and First Quantum

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

The idea behind Take Two Interactive Software and First Quantum Minerals 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.