Correlation Between Take Two and Calibre Mining

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

Diversification Opportunities for Take Two and Calibre Mining

-0.52

Correlation Coefficient

Take Two  Calibre Mining

Excellent diversification

The 3 months correlation between Take and Calibre is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp 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 Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Take Two i.e., Take Two and Calibre Mining go up and down completely randomly.

Pair Corralation between Take Two and Calibre Mining

Assuming the 90 days horizon Take Two is expected to generate 1.65 times less return on investment than Calibre Mining. But when comparing it to its historical volatility, Take Two Interactive Software is 1.6 times less risky than Calibre Mining. It trades about 0.07 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  71.00  in Calibre Mining Corp on October 25, 2024 and sell it today you would earn a total of  94.00  from holding Calibre Mining Corp or generate 132.39% return on investment over 90 days.

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

Take Two Interactive Software  vs.  Calibre Mining Corp

Take Two Interactive

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Take Two reported solid returns over the last few months and may actually be approaching a breakup point.

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Calibre Mining is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Take Two and Calibre Mining

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

The idea behind Take Two Interactive Software and Calibre Mining Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .