Correlation Between Take-Two Interactive and HYATT HOTELS

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

Diversification Opportunities for Take-Two Interactive and HYATT HOTELS

0.52

Correlation Coefficient

Take-Two Interactive  HYATT HOTELS

Very weak diversification

The 3 months correlation between Take-Two and HYATT is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A 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 HYATT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and HYATT HOTELS go up and down completely randomly.

Pair Corralation between Take-Two Interactive and HYATT HOTELS

Assuming the 90 days horizon Take-Two Interactive is expected to generate 3922.0 times less return on investment than HYATT HOTELS. But when comparing it to its historical volatility, Take Two Interactive Software is 1.36 times less risky than HYATT HOTELS. It trades about 0.0 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  9,885  in HYATT HOTELS A on April 25, 2025 and sell it today you would earn a total of  2,625  from holding HYATT HOTELS A or generate 26.56% return on investment over 90 days.

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

Take Two Interactive Software  vs.  HYATT HOTELS A

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 nearly stable basic indicators, Take-Two Interactive is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

HYATT HOTELS A

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HYATT HOTELS A are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, HYATT HOTELS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Take-Two Interactive and HYATT HOTELS

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

The idea behind Take Two Interactive Software and HYATT HOTELS A 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.