Correlation Between Take Two and 50247VAB5

Can any of the company-specific risk be diversified away by investing in both Take Two and 50247VAB5 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 50247VAB5 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 LYB INTL FIN, you can compare the effects of market volatilities on Take Two and 50247VAB5 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 50247VAB5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and 50247VAB5.

Diversification Opportunities for Take Two and 50247VAB5

-0.47

Correlation Coefficient

Take Two  50247VAB5

Very good diversification

The 3 months correlation between Take and 50247VAB5 is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and LYB INTL FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTL FIN 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 50247VAB5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTL FIN has no effect on the direction of Take Two i.e., Take Two and 50247VAB5 go up and down completely randomly.

Pair Corralation between Take Two and 50247VAB5

Given the investment horizon of 90 days Take Two Interactive Software is expected to generate 0.95 times more return on investment than 50247VAB5. However, Take Two Interactive Software is 1.05 times less risky than 50247VAB5. It trades about 0.03 of its potential returns per unit of risk. LYB INTL FIN is currently generating about -0.39 per unit of risk. If you would invest  18,790  in Take Two Interactive Software on October 9, 2024 and sell it today you would earn a total of  108.00  from holding Take Two Interactive Software or generate 0.57% 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.  LYB INTL FIN

Take Two Interactive

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 19 (%) 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.

LYB INTL FIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB INTL FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for LYB INTL FIN investors.

Pair Trading with Take Two and 50247VAB5

The main advantage of trading using opposite Take Two and 50247VAB5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, 50247VAB5 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 50247VAB5 will offset losses from the drop in 50247VAB5's long position.

The idea behind Take Two Interactive Software and LYB INTL FIN 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.