Correlation Between Electronic Arts and Atalaya Mining
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Atalaya Mining 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 Atalaya Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Atalaya Mining, you can compare the effects of market volatilities on Electronic Arts and Atalaya Mining 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 Atalaya Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Atalaya Mining.
Diversification Opportunities for Electronic Arts and Atalaya Mining
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electronic and Atalaya is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining 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 Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Electronic Arts i.e., Electronic Arts and Atalaya Mining go up and down completely randomly.
Pair Corralation between Electronic Arts and Atalaya Mining
Assuming the 90 days trading horizon Electronic Arts is expected to under-perform the Atalaya Mining. But the stock apears to be less risky and, when comparing its historical volatility, Electronic Arts is 2.09 times less risky than Atalaya Mining. The stock trades about -0.58 of its potential returns per unit of risk. The Atalaya Mining is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 35,700 in Atalaya Mining on October 14, 2024 and sell it today you would earn a total of 1,800 from holding Atalaya Mining or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Electronic Arts vs. Atalaya Mining
Performance |
| Timeline |
| Electronic Arts |
| Atalaya Mining |
Electronic Arts and Atalaya Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Atalaya Mining
The main advantage of trading using opposite Electronic Arts and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Atalaya Mining 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 Atalaya Mining will offset losses from the drop in Atalaya Mining's long position.| Electronic Arts vs. Tavistock Investments Plc | Electronic Arts vs. Smithson Investment Trust | Electronic Arts vs. Seraphim Space Investment | Electronic Arts vs. Gaztransport et Technigaz |
| Atalaya Mining vs. Accesso Technology Group | Atalaya Mining vs. Sabien Technology Group | Atalaya Mining vs. Electronic Arts | Atalaya Mining vs. LPKF Laser Electronics |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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