Correlation Between Electronic Arts and Seraphim Space
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Seraphim Space 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 Seraphim Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Seraphim Space Investment, you can compare the effects of market volatilities on Electronic Arts and Seraphim Space 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 Seraphim Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Seraphim Space.
Diversification Opportunities for Electronic Arts and Seraphim Space
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Electronic and Seraphim is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Seraphim Space Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seraphim Space Investment 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 Seraphim Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seraphim Space Investment has no effect on the direction of Electronic Arts i.e., Electronic Arts and Seraphim Space go up and down completely randomly.
Pair Corralation between Electronic Arts and Seraphim Space
Assuming the 90 days trading horizon Electronic Arts is expected to generate 3.23 times less return on investment than Seraphim Space. But when comparing it to its historical volatility, Electronic Arts is 2.17 times less risky than Seraphim Space. It trades about 0.42 of its potential returns per unit of risk. Seraphim Space Investment is currently generating about 0.63 of returns per unit of risk over similar time horizon. If you would invest 4,680 in Seraphim Space Investment on September 2, 2024 and sell it today you would earn a total of 1,300 from holding Seraphim Space Investment or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Electronic Arts vs. Seraphim Space Investment
Performance |
| Timeline |
| Electronic Arts |
| Seraphim Space Investment |
Electronic Arts and Seraphim Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Seraphim Space
The main advantage of trading using opposite Electronic Arts and Seraphim Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Seraphim Space 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 Seraphim Space will offset losses from the drop in Seraphim Space's long position.| Electronic Arts vs. Uniper SE | Electronic Arts vs. Mulberry Group PLC | Electronic Arts vs. London Security Plc | Electronic Arts vs. Triad Group PLC |
| Seraphim Space vs. PureTech Health plc | Seraphim Space vs. Albion Technology General | Seraphim Space vs. Celebrus Technologies plc | Seraphim Space vs. Ashtead Technology Holdings |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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