Correlation Between Take Two and BioNTech
Can any of the company-specific risk be diversified away by investing in both Take Two and BioNTech 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 BioNTech 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 BioNTech SE, you can compare the effects of market volatilities on Take Two and BioNTech 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 BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and BioNTech.
Diversification Opportunities for Take Two and BioNTech
Good diversification
The 3 months correlation between Take and BioNTech is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE 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 BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Take Two i.e., Take Two and BioNTech go up and down completely randomly.
Pair Corralation between Take Two and BioNTech
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.45 times more return on investment than BioNTech. However, Take Two Interactive Software is 2.22 times less risky than BioNTech. It trades about 0.23 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.01 per unit of risk. If you would invest 14,995 in Take Two Interactive Software on September 25, 2024 and sell it today you would earn a total of 3,234 from holding Take Two Interactive Software or generate 21.57% 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. BioNTech SE
Performance |
Timeline |
Take Two Interactive |
BioNTech SE |
Take Two and BioNTech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Take Two and BioNTech
The main advantage of trading using opposite Take Two and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, BioNTech 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 BioNTech will offset losses from the drop in BioNTech's long position.Take Two vs. Uniper SE | Take Two vs. Mulberry Group PLC | Take Two vs. London Security Plc | Take Two vs. Triad Group PLC |
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Check out your portfolio center.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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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