Correlation Between Take-Two Interactive and Strategic Education

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

Diversification Opportunities for Take-Two Interactive and Strategic Education

0.32

Correlation Coefficient

Take-Two Interactive  Strategic Education

Weak diversification

The 3 months correlation between Take-Two and Strategic is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Education 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of Take-Two Interactive i.e., Take-Two Interactive and Strategic Education go up and down completely randomly.

Pair Corralation between Take-Two Interactive and Strategic Education

Assuming the 90 days horizon Take Two Interactive Software is expected to generate 0.98 times more return on investment than Strategic Education. However, Take Two Interactive Software is 1.02 times less risky than Strategic Education. It trades about -0.15 of its potential returns per unit of risk. Strategic Education is currently generating about -0.17 per unit of risk. If you would invest  20,875  in Take Two Interactive Software on April 20, 2025 and sell it today you would lose (1,001) from holding Take Two Interactive Software or give up 4.8% 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.  Strategic Education

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 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Take-Two Interactive may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Strategic Education

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Education are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Strategic Education is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Take-Two Interactive and Strategic Education

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

The idea behind Take Two Interactive Software and Strategic Education 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.