Correlation Between Electronic Arts and Fidelity National
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Fidelity National 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 Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Fidelity National Information, you can compare the effects of market volatilities on Electronic Arts and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Fidelity National.
Diversification Opportunities for Electronic Arts and Fidelity National
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Electronic and Fidelity is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Electronic Arts i.e., Electronic Arts and Fidelity National go up and down completely randomly.
Pair Corralation between Electronic Arts and Fidelity National
Assuming the 90 days trading horizon Electronic Arts is expected to generate 2.01 times less return on investment than Fidelity National. But when comparing it to its historical volatility, Electronic Arts is 1.17 times less risky than Fidelity National. It trades about 0.08 of its potential returns per unit of risk. Fidelity National Information is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,783 in Fidelity National Information on September 2, 2024 and sell it today you would earn a total of 2,752 from holding Fidelity National Information or generate 47.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Electronic Arts vs. Fidelity National Information
Performance |
| Timeline |
| Electronic Arts |
| Fidelity National |
Electronic Arts and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Fidelity National
The main advantage of trading using opposite Electronic Arts and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| Electronic Arts vs. Uniper SE | Electronic Arts vs. Mulberry Group PLC | Electronic Arts vs. London Security Plc | Electronic Arts vs. Triad Group PLC |
| Fidelity National vs. Uniper SE | Fidelity National vs. Mulberry Group PLC | Fidelity National vs. London Security Plc | Fidelity National vs. Triad Group 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |