Correlation Between Take Two and JD

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

Diversification Opportunities for Take Two and JD

-0.3

Correlation Coefficient

Take Two  JD

Very good diversification

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

Pair Corralation between Take Two and JD

Given the investment horizon of 90 days Take Two Interactive Software is expected to generate 0.65 times more return on investment than JD. However, Take Two Interactive Software is 1.55 times less risky than JD. It trades about -0.02 of its potential returns per unit of risk. JD Inc Adr is currently generating about -0.06 per unit of risk. If you would invest  22,532  in Take Two Interactive Software on May 4, 2025 and sell it today you would lose (474.00) from holding Take Two Interactive Software or give up 2.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Take Two Interactive Software  vs.  JD Inc Adr

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. In spite of very healthy basic indicators, Take Two is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

JD Inc Adr

Risk-Adjusted Performance

Very Weak

Over the last 90 days JD Inc Adr has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Take Two and JD

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

The idea behind Take Two Interactive Software and JD Inc Adr 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.