Correlation Between Take Two and AMG Advanced

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

Diversification Opportunities for Take Two and AMG Advanced

0.48

Correlation Coefficient

Take Two  AMG Advanced

Very weak diversification

The 3 months correlation between Take and AMG is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Take Two i.e., Take Two and AMG Advanced go up and down completely randomly.

Pair Corralation between Take Two and AMG Advanced

Assuming the 90 days trading horizon Take Two is expected to generate 18.45 times less return on investment than AMG Advanced. But when comparing it to its historical volatility, Take Two Interactive Software is 2.16 times less risky than AMG Advanced. It trades about 0.03 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,575  in AMG Advanced Metallurgical on April 25, 2025 and sell it today you would earn a total of  1,001  from holding AMG Advanced Metallurgical or generate 63.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Take Two Interactive Software  vs.  AMG Advanced Metallurgical

Take Two Interactive

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Take Two is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

AMG Advanced Metallu

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AMG Advanced Metallurgical are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AMG Advanced unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Take Two and AMG Advanced

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

The idea behind Take Two Interactive Software and AMG Advanced Metallurgical 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.