Correlation Between Take Two and Sydbank AS

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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 Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Take Two Interactive Software  vs.  Sydbank AS

 Performance 
       Timeline  
Take Two Interactive 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 14 (%) 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.
Sydbank AS 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sydbank AS reported solid returns over the last few months and may actually be approaching a breakup point.

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.
The idea behind Take Two Interactive Software and Sydbank AS 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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