Correlation Between Electronic Arts and Eagle Eye
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Eagle Eye 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 Eagle Eye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Eagle Eye Solutions, you can compare the effects of market volatilities on Electronic Arts and Eagle Eye 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 Eagle Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Eagle Eye.
Diversification Opportunities for Electronic Arts and Eagle Eye
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Electronic and Eagle is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Eagle Eye Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Eye Solutions 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 Eagle Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Eye Solutions has no effect on the direction of Electronic Arts i.e., Electronic Arts and Eagle Eye go up and down completely randomly.
Pair Corralation between Electronic Arts and Eagle Eye
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.12 times more return on investment than Eagle Eye. However, Electronic Arts is 8.57 times less risky than Eagle Eye. It trades about -0.22 of its potential returns per unit of risk. Eagle Eye Solutions is currently generating about -0.21 per unit of risk. If you would invest 14,732 in Electronic Arts on October 24, 2024 and sell it today you would lose (431.00) from holding Electronic Arts or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Electronic Arts vs. Eagle Eye Solutions
Performance |
| Timeline |
| Electronic Arts |
| Eagle Eye Solutions |
Electronic Arts and Eagle Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Eagle Eye
The main advantage of trading using opposite Electronic Arts and Eagle Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Eagle Eye 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 Eagle Eye will offset losses from the drop in Eagle Eye's long position.| Electronic Arts vs. Telecom Italia SpA | Electronic Arts vs. Charter Communications Cl | Electronic Arts vs. Induction Healthcare Group | Electronic Arts vs. Abingdon Health Plc |
| Eagle Eye vs. Monster Beverage Corp | Eagle Eye vs. Polar Capital Technology | Eagle Eye vs. Electronic Arts | Eagle Eye 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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