Correlation Between DFS Furniture and Take-Two Interactive

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

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

Diversification Opportunities for DFS Furniture and Take-Two Interactive

0.07

Correlation Coefficient

DFS Furniture  Take-Two Interactive

Significant diversification

The 3 months correlation between DFS and Take-Two is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC 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 DFS Furniture 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 DFS Furniture PLC are associated (or correlated) with Take-Two Interactive. 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 DFS Furniture i.e., DFS Furniture and Take-Two Interactive go up and down completely randomly.

Pair Corralation between DFS Furniture and Take-Two Interactive

Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 1.01 times more return on investment than Take-Two Interactive. However, DFS Furniture is 1.01 times more volatile than Take Two Interactive Software. It trades about 0.13 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.0 per unit of risk. If you would invest  14,100  in DFS Furniture PLC on September 13, 2025 and sell it today you would earn a total of  1,900  from holding DFS Furniture PLC or generate 13.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

DFS Furniture PLC  vs.  Take Two Interactive Software

DFS Furniture PLC

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in DFS Furniture PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, DFS Furniture exhibited solid returns over the last few months and may actually be approaching a breakup point.

Take Two Interactive

Risk-Adjusted Performance

Weakest

Over the last 90 days Take Two Interactive Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Take-Two Interactive is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with DFS Furniture and Take-Two Interactive

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

The idea behind DFS Furniture PLC 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.