Correlation Between Electronic Arts and National Atomic
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and National Atomic 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 National Atomic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and National Atomic Co, you can compare the effects of market volatilities on Electronic Arts and National Atomic 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 National Atomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and National Atomic.
Diversification Opportunities for Electronic Arts and National Atomic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electronic and National is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and National Atomic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Atomic 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 National Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Atomic has no effect on the direction of Electronic Arts i.e., Electronic Arts and National Atomic go up and down completely randomly.
Pair Corralation between Electronic Arts and National Atomic
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.69 times more return on investment than National Atomic. However, Electronic Arts is 1.45 times less risky than National Atomic. It trades about 0.51 of its potential returns per unit of risk. National Atomic Co is currently generating about 0.24 per unit of risk. If you would invest 15,259 in Electronic Arts on September 4, 2024 and sell it today you would earn a total of 1,456 from holding Electronic Arts or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. National Atomic Co
Performance |
| Timeline |
| Electronic Arts |
| National Atomic |
Electronic Arts and National Atomic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and National Atomic
The main advantage of trading using opposite Electronic Arts and National Atomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, National Atomic 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 National Atomic will offset losses from the drop in National Atomic's long position.| Electronic Arts vs. Centaur Media | Electronic Arts vs. Oakley Capital Investments | Electronic Arts vs. Live Nation Entertainment | Electronic Arts vs. New Residential Investment |
| National Atomic vs. Panther Metals PLC | National Atomic vs. LPKF Laser Electronics | National Atomic vs. Electronic Arts | National Atomic vs. Creo Medical Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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