Correlation Between Take Two and Beyond Meat

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

Diversification Opportunities for Take Two and Beyond Meat

-0.05

Correlation Coefficient

Take Two  Beyond Meat

Good diversification

The 3 months correlation between Take and Beyond is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Take Two i.e., Take Two and Beyond Meat go up and down completely randomly.

Pair Corralation between Take Two and Beyond Meat

Assuming the 90 days trading horizon Take Two is expected to generate 38.34 times less return on investment than Beyond Meat. But when comparing it to its historical volatility, Take Two Interactive Software is 2.77 times less risky than Beyond Meat. It trades about 0.01 of its potential returns per unit of risk. Beyond Meat is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  72.00  in Beyond Meat on April 6, 2025 and sell it today you would earn a total of  27.00  from holding Beyond Meat or generate 37.5% return on investment over 90 days.

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

Take Two Interactive Software  vs.  Beyond Meat

Take Two Interactive

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Take Two sustained solid returns over the last few months and may actually be approaching a breakup point.

Beyond Meat

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Meat are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beyond Meat sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Take Two and Beyond Meat

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

The idea behind Take Two Interactive Software and Beyond Meat 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.