Correlation Between Take-Two Interactive and Autohome ADR
Can any of the company-specific risk be diversified away by investing in both Take-Two Interactive and Autohome ADR 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 Interactive and Autohome ADR 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 Autohome ADR, you can compare the effects of market volatilities on Take-Two Interactive and Autohome ADR 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 Interactive with a short position of Autohome ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take-Two Interactive and Autohome ADR.
Diversification Opportunities for Take-Two Interactive and Autohome ADR
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Take-Two and Autohome is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR and Take-Two Interactive 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 Autohome ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome ADR has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and Autohome ADR go up and down completely randomly.
Pair Corralation between Take-Two Interactive and Autohome ADR
Assuming the 90 days horizon Take Two Interactive Software is expected to generate 0.55 times more return on investment than Autohome ADR. However, Take Two Interactive Software is 1.81 times less risky than Autohome ADR. It trades about 0.24 of its potential returns per unit of risk. Autohome ADR is currently generating about 0.07 per unit of risk. If you would invest 14,250 in Take Two Interactive Software on September 5, 2024 and sell it today you would earn a total of 3,602 from holding Take Two Interactive Software or generate 25.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Take Two Interactive Software vs. Autohome ADR
Performance |
Timeline |
Take Two Interactive |
Autohome ADR |
Take-Two Interactive and Autohome ADR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Take-Two Interactive and Autohome ADR
The main advantage of trading using opposite Take-Two Interactive and Autohome ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take-Two Interactive position performs unexpectedly, Autohome ADR 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 Autohome ADR will offset losses from the drop in Autohome ADR's long position.Take-Two Interactive vs. REINET INVESTMENTS SCA | Take-Two Interactive vs. AOYAMA TRADING | Take-Two Interactive vs. Cogent Communications Holdings | Take-Two Interactive vs. Charter Communications |
Autohome ADR vs. Take Two Interactive Software | Autohome ADR vs. Southwest Airlines Co | Autohome ADR vs. VITEC SOFTWARE GROUP | Autohome ADR vs. United Airlines Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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