Correlation Between Electronic Arts and Jadestone Energy
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Jadestone Energy 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 Jadestone Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Jadestone Energy, you can compare the effects of market volatilities on Electronic Arts and Jadestone Energy 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 Jadestone Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Jadestone Energy.
Diversification Opportunities for Electronic Arts and Jadestone Energy
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electronic and Jadestone is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Jadestone Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadestone Energy 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 Jadestone Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadestone Energy has no effect on the direction of Electronic Arts i.e., Electronic Arts and Jadestone Energy go up and down completely randomly.
Pair Corralation between Electronic Arts and Jadestone Energy
Assuming the 90 days trading horizon Electronic Arts is expected to generate 2.94 times less return on investment than Jadestone Energy. But when comparing it to its historical volatility, Electronic Arts is 2.22 times less risky than Jadestone Energy. It trades about 0.05 of its potential returns per unit of risk. Jadestone Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,450 in Jadestone Energy on September 14, 2024 and sell it today you would earn a total of 50.00 from holding Jadestone Energy or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Electronic Arts vs. Jadestone Energy
Performance |
| Timeline |
| Electronic Arts |
| Jadestone Energy |
Electronic Arts and Jadestone Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Jadestone Energy
The main advantage of trading using opposite Electronic Arts and Jadestone Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Jadestone Energy 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 Jadestone Energy will offset losses from the drop in Jadestone Energy's long position.| Electronic Arts vs. Alior Bank SA | Electronic Arts vs. Ameriprise Financial | Electronic Arts vs. MT Bank Corp | Electronic Arts vs. Cembra Money Bank |
| Jadestone Energy vs. LPKF Laser Electronics | Jadestone Energy vs. Infrastrutture Wireless Italiane | Jadestone Energy vs. Scandic Hotels Group | Jadestone Energy vs. Electronic Arts |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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