Correlation Between TELES Informationstech and Take-Two Interactive

Can any of the company-specific risk be diversified away by investing in both TELES Informationstech and Take-Two Interactive 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 TELES Informationstech and Take-Two Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TELES Informationstechnologien AG and Take Two Interactive Software, you can compare the effects of market volatilities on TELES Informationstech and Take-Two Interactive 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 TELES Informationstech with a short position of Take-Two Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of TELES Informationstech and Take-Two Interactive.

Diversification Opportunities for TELES Informationstech and Take-Two Interactive

-0.92

Correlation Coefficient

TELES Informationstech  Take-Two Interactive

Pay attention - limited upside

The 3 months correlation between TELES and Take-Two is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding TELES Informationstechnologien and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive and TELES Informationstech 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 TELES Informationstechnologien AG are associated (or correlated) with Take-Two Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of TELES Informationstech i.e., TELES Informationstech and Take-Two Interactive go up and down completely randomly.

Pair Corralation between TELES Informationstech and Take-Two Interactive

Assuming the 90 days trading horizon TELES Informationstechnologien AG is expected to under-perform the Take-Two Interactive. In addition to that, TELES Informationstech is 2.5 times more volatile than Take Two Interactive Software. It trades about -0.15 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.26 per unit of volatility. If you would invest  14,120  in Take Two Interactive Software on October 12, 2024 and sell it today you would earn a total of  3,632  from holding Take Two Interactive Software or generate 25.72% return on investment over 90 days.

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

TELES Informationstechnologien  vs.  Take Two Interactive Software

TELES Informationstech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TELES Informationstechnologien AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Take Two Interactive

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 20 (%) 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.

Pair Trading with TELES Informationstech and Take-Two Interactive

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

The idea behind TELES Informationstechnologien AG and Take Two Interactive Software 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.