Correlation Between Electronic Arts and Anglesey Mining
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Anglesey 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 Anglesey 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 Anglesey Mining, you can compare the effects of market volatilities on Electronic Arts and Anglesey 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 Anglesey Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Anglesey Mining.
Diversification Opportunities for Electronic Arts and Anglesey Mining
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electronic and Anglesey is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey 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 Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of Electronic Arts i.e., Electronic Arts and Anglesey Mining go up and down completely randomly.
Pair Corralation between Electronic Arts and Anglesey Mining
Assuming the 90 days trading horizon Electronic Arts is expected to under-perform the Anglesey Mining. But the stock apears to be less risky and, when comparing its historical volatility, Electronic Arts is 2.03 times less risky than Anglesey Mining. The stock trades about -0.28 of its potential returns per unit of risk. The Anglesey Mining is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 73.00 in Anglesey Mining on October 28, 2024 and sell it today you would lose (8.00) from holding Anglesey Mining or give up 10.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Anglesey Mining
Performance |
| Timeline |
| Electronic Arts |
| Anglesey Mining |
Electronic Arts and Anglesey Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Anglesey Mining
The main advantage of trading using opposite Electronic Arts and Anglesey Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Anglesey 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 Anglesey Mining will offset losses from the drop in Anglesey Mining's long position.| Electronic Arts vs. Berkshire Hathaway | Electronic Arts vs. Samsung Electronics Co | Electronic Arts vs. Samsung Electronics Co | Electronic Arts vs. Chocoladefabriken Lindt Spruengli |
| Anglesey Mining vs. Travel Leisure Co | Anglesey Mining vs. Home Depot | Anglesey Mining vs. URU Metals | Anglesey Mining vs. Wyndham 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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