Correlation Between Electronic Arts and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Grieg Seafood 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 Electronic Arts and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Grieg Seafood, you can compare the effects of market volatilities on Electronic Arts and Grieg Seafood 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 Electronic Arts with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Grieg Seafood.
Diversification Opportunities for Electronic Arts and Grieg Seafood
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electronic and Grieg is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and Electronic Arts 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 Electronic Arts are associated (or correlated) with Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood has no effect on the direction of Electronic Arts i.e., Electronic Arts and Grieg Seafood go up and down completely randomly.
Pair Corralation between Electronic Arts and Grieg Seafood
Assuming the 90 days trading horizon Electronic Arts is expected to under-perform the Grieg Seafood. In addition to that, Electronic Arts is 1.15 times more volatile than Grieg Seafood. It trades about -0.18 of its total potential returns per unit of risk. Grieg Seafood is currently generating about 0.25 per unit of volatility. If you would invest 6,235 in Grieg Seafood on November 4, 2024 and sell it today you would earn a total of 1,210 from holding Grieg Seafood or generate 19.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Grieg Seafood
Performance |
| Timeline |
| Electronic Arts |
| Grieg Seafood |
Electronic Arts and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Grieg Seafood
The main advantage of trading using opposite Electronic Arts and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| Electronic Arts vs. Bytes Technology | Electronic Arts vs. Elmos Semiconductor SE | Electronic Arts vs. Raytheon Technologies Corp | Electronic Arts vs. Zurich Insurance Group |
| Grieg Seafood vs. Scandinavian Tobacco Group | Grieg Seafood vs. Cairo Communication SpA | Grieg Seafood vs. Westlake Chemical Corp | Grieg Seafood vs. Cairn Homes PLC |
Check out your portfolio center.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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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