Correlation Between Take-Two Interactive and Zoom Video

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

Diversification Opportunities for Take-Two Interactive and Zoom Video

0.3

Correlation Coefficient

Take-Two Interactive  Zoom Video

Weak diversification

The 3 months correlation between Take-Two and Zoom is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and Zoom Video go up and down completely randomly.

Pair Corralation between Take-Two Interactive and Zoom Video

Assuming the 90 days horizon Take Two Interactive Software is expected to under-perform the Zoom Video. In addition to that, Take-Two Interactive is 1.33 times more volatile than Zoom Video Communications. It trades about -0.16 of its total potential returns per unit of risk. Zoom Video Communications is currently generating about -0.21 per unit of volatility. If you would invest  6,671  in Zoom Video Communications on April 23, 2025 and sell it today you would lose (305.00) from holding Zoom Video Communications or give up 4.57% of portfolio value over 90 days.

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

Take Two Interactive Software  vs.  Zoom Video Communications

Take Two Interactive

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Take-Two Interactive is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Zoom Video Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zoom Video Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Zoom Video 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 Interactive and Zoom Video

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

The idea behind Take Two Interactive Software and Zoom Video Communications 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.