Correlation Between Take Two and Baird Medical

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

Diversification Opportunities for Take Two and Baird Medical

-0.04

Correlation Coefficient

Take Two  Baird Medical

Good diversification

The 3 months correlation between Take and Baird is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Baird Medical Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Medical Investment 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 Baird Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Medical Investment has no effect on the direction of Take Two i.e., Take Two and Baird Medical go up and down completely randomly.

Pair Corralation between Take Two and Baird Medical

Given the investment horizon of 90 days Take Two is expected to generate 44.87 times less return on investment than Baird Medical. But when comparing it to its historical volatility, Take Two Interactive Software is 35.19 times less risky than Baird Medical. It trades about 0.1 of its potential returns per unit of risk. Baird Medical Investment is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  155.00  in Baird Medical Investment on December 18, 2024 and sell it today you would earn a total of  442.00  from holding Baird Medical Investment or generate 285.16% return on investment over 90 days.

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

Take Two Interactive Software  vs.  Baird Medical Investment

Take Two Interactive

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Take Two displayed solid returns over the last few months and may actually be approaching a breakup point.

Baird Medical Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baird Medical Investment are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, Baird Medical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Take Two and Baird Medical

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

The idea behind Take Two Interactive Software and Baird Medical Investment 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.