Correlation Between Electronic Arts and Ametek
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Ametek 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 Ametek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Ametek Inc, you can compare the effects of market volatilities on Electronic Arts and Ametek 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 Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Ametek.
Diversification Opportunities for Electronic Arts and Ametek
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Electronic and Ametek is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc 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 Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of Electronic Arts i.e., Electronic Arts and Ametek go up and down completely randomly.
Pair Corralation between Electronic Arts and Ametek
Assuming the 90 days trading horizon Electronic Arts is expected to generate 1.26 times less return on investment than Ametek. But when comparing it to its historical volatility, Electronic Arts is 1.32 times less risky than Ametek. It trades about 0.06 of its potential returns per unit of risk. Ametek Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 15,353 in Ametek Inc on September 14, 2024 and sell it today you would earn a total of 3,517 from holding Ametek Inc or generate 22.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Ametek Inc
Performance |
| Timeline |
| Electronic Arts |
| Ametek Inc |
Electronic Arts and Ametek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Ametek
The main advantage of trading using opposite Electronic Arts and Ametek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Ametek 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 Ametek will offset losses from the drop in Ametek's long position.| Electronic Arts vs. Alior Bank SA | Electronic Arts vs. Ameriprise Financial | Electronic Arts vs. MT Bank Corp | Electronic Arts vs. Cembra Money Bank |
| Ametek vs. Wyndham Hotels Resorts | Ametek vs. Kaufman Et Broad | Ametek vs. Broadcom | Ametek vs. Park Hotels Resorts |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |