Correlation Between Take Two and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both Take Two and STMicroelectronics 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 STMicroelectronics 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 STMicroelectronics NV, you can compare the effects of market volatilities on Take Two and STMicroelectronics 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 STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and STMicroelectronics.
Diversification Opportunities for Take Two and STMicroelectronics
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Take and STMicroelectronics is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics 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 STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics has no effect on the direction of Take Two i.e., Take Two and STMicroelectronics go up and down completely randomly.
Pair Corralation between Take Two and STMicroelectronics
Assuming the 90 days trading horizon Take Two Interactive Software is expected to generate 0.88 times more return on investment than STMicroelectronics. However, Take Two Interactive Software is 1.14 times less risky than STMicroelectronics. It trades about 0.24 of its potential returns per unit of risk. STMicroelectronics NV is currently generating about 0.01 per unit of risk. If you would invest 21,560 in Take Two Interactive Software on September 11, 2024 and sell it today you would earn a total of 5,780 from holding Take Two Interactive Software or generate 26.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Take Two Interactive Software vs. STMicroelectronics NV
Performance |
Timeline |
Take Two Interactive |
STMicroelectronics |
Take Two and STMicroelectronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Take Two and STMicroelectronics
The main advantage of trading using opposite Take Two and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.Take Two vs. Electronic Arts | Take Two vs. LIFE CAPITAL PARTNERS | Take Two vs. EOG Resources | Take Two vs. Fras le SA |
STMicroelectronics vs. Taiwan Semiconductor Manufacturing | STMicroelectronics vs. Broadcom | STMicroelectronics vs. Micron Technology | STMicroelectronics vs. NXP Semiconductors NV |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |