Correlation Between Electronic Arts and Fulcrum Metals
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Fulcrum Metals 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 Fulcrum Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Fulcrum Metals PLC, you can compare the effects of market volatilities on Electronic Arts and Fulcrum Metals 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 Fulcrum Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Fulcrum Metals.
Diversification Opportunities for Electronic Arts and Fulcrum Metals
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electronic and Fulcrum is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Fulcrum Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Metals PLC 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 Fulcrum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Metals PLC has no effect on the direction of Electronic Arts i.e., Electronic Arts and Fulcrum Metals go up and down completely randomly.
Pair Corralation between Electronic Arts and Fulcrum Metals
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.43 times more return on investment than Fulcrum Metals. However, Electronic Arts is 2.32 times less risky than Fulcrum Metals. It trades about 0.08 of its potential returns per unit of risk. Fulcrum Metals PLC is currently generating about -0.1 per unit of risk. If you would invest 13,730 in Electronic Arts on August 25, 2024 and sell it today you would earn a total of 3,052 from holding Electronic Arts or generate 22.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Electronic Arts vs. Fulcrum Metals PLC
Performance |
| Timeline |
| Electronic Arts |
| Fulcrum Metals PLC |
Electronic Arts and Fulcrum Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Fulcrum Metals
The main advantage of trading using opposite Electronic Arts and Fulcrum Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Fulcrum Metals 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 Fulcrum Metals will offset losses from the drop in Fulcrum Metals' long position.| Electronic Arts vs. Samsung Electronics Co | Electronic Arts vs. Samsung Electronics Co | Electronic Arts vs. Hyundai Motor | Electronic Arts vs. Toyota Motor Corp |
| Fulcrum Metals vs. Dolly Varden Silver | Fulcrum Metals vs. Lundin Mining Corp | Fulcrum Metals vs. Zegona Communications Plc | Fulcrum Metals vs. Verizon Communications |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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