Correlation Between Take Two and Itasa Investimentos

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

Diversification Opportunities for Take Two and Itasa Investimentos

0.18

Correlation Coefficient

Take Two  Itasa Investimentos

Average diversification

The 3 months correlation between Take and Itasa is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Itasa Investimentos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itasa Investimentos 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 Itasa Investimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itasa Investimentos has no effect on the direction of Take Two i.e., Take Two and Itasa Investimentos go up and down completely randomly.

Pair Corralation between Take Two and Itasa Investimentos

Assuming the 90 days trading horizon Take Two Interactive Software is expected to under-perform the Itasa Investimentos. In addition to that, Take Two is 1.38 times more volatile than Itasa Investimentos. It trades about -0.01 of its total potential returns per unit of risk. Itasa Investimentos is currently generating about 0.01 per unit of volatility. If you would invest  1,050  in Itasa Investimentos on April 25, 2025 and sell it today you would earn a total of  4.00  from holding Itasa Investimentos or generate 0.38% return on investment over 90 days.

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

Take Two Interactive Software  vs.  Itasa Investimentos

Take Two Interactive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Take Two Interactive Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Take Two is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Itasa Investimentos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Itasa Investimentos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Itasa Investimentos 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 Take Two and Itasa Investimentos

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

The idea behind Take Two Interactive Software and Itasa Investimentos 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.