Correlation Between Take Two and Sydbank AS
Can any of the company-specific risk be diversified away by investing in both Take Two and Sydbank AS 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 Sydbank AS 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 Sydbank AS, you can compare the effects of market volatilities on Take Two and Sydbank AS 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 Sydbank AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and Sydbank AS.
Diversification Opportunities for Take Two and Sydbank AS
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Take and Sydbank is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS 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 Sydbank AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank AS has no effect on the direction of Take Two i.e., Take Two and Sydbank AS go up and down completely randomly.
Pair Corralation between Take Two and Sydbank AS
Assuming the 90 days horizon Take Two Interactive Software is expected to generate 0.78 times more return on investment than Sydbank AS. However, Take Two Interactive Software is 1.27 times less risky than Sydbank AS. It trades about 0.18 of its potential returns per unit of risk. Sydbank AS is currently generating about 0.13 per unit of risk. If you would invest 14,896 in Take Two Interactive Software on October 27, 2024 and sell it today you would earn a total of 2,626 from holding Take Two Interactive Software or generate 17.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Take Two Interactive Software vs. Sydbank AS
Performance |
Timeline |
Take Two Interactive |
Sydbank AS |
Take Two and Sydbank AS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Take Two and Sydbank AS
The main advantage of trading using opposite Take Two and Sydbank AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, Sydbank AS 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 Sydbank AS will offset losses from the drop in Sydbank AS's long position.Take Two vs. Tower One Wireless | Take Two vs. QBE Insurance Group | Take Two vs. United Insurance Holdings | Take Two vs. CITY OFFICE REIT |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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