Correlation Between Central Asia and Take Two

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

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

Diversification Opportunities for Central Asia and Take Two

-0.91

Correlation Coefficient

Central Asia  Take Two

Pay attention - limited upside

The 3 months correlation between Central and Take is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals 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 Central Asia 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 Central Asia Metals are associated (or correlated) with Take Two. 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 Central Asia i.e., Central Asia and Take Two go up and down completely randomly.

Pair Corralation between Central Asia and Take Two

Assuming the 90 days trading horizon Central Asia Metals is expected to under-perform the Take Two. In addition to that, Central Asia is 1.1 times more volatile than Take Two Interactive Software. It trades about -0.03 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.07 per unit of volatility. If you would invest  10,675  in Take Two Interactive Software on September 26, 2024 and sell it today you would earn a total of  7,859  from holding Take Two Interactive Software or generate 73.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.4%
Values	Daily Returns

Central Asia Metals  vs.  Take Two Interactive Software

Central Asia Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Central Asia Metals 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 basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Take Two Interactive

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Take Two unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Central Asia and Take Two

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

The idea behind Central Asia Metals 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.