Correlation Between Electronic Arts and Taylor Maritime
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Taylor Maritime 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 Taylor Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Taylor Maritime Investments, you can compare the effects of market volatilities on Electronic Arts and Taylor Maritime 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 Taylor Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Taylor Maritime.
Diversification Opportunities for Electronic Arts and Taylor Maritime
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electronic and Taylor is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Taylor Maritime Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taylor Maritime Inve 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 Taylor Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taylor Maritime Inve has no effect on the direction of Electronic Arts i.e., Electronic Arts and Taylor Maritime go up and down completely randomly.
Pair Corralation between Electronic Arts and Taylor Maritime
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.73 times more return on investment than Taylor Maritime. However, Electronic Arts is 1.37 times less risky than Taylor Maritime. It trades about 0.14 of its potential returns per unit of risk. Taylor Maritime Investments is currently generating about -0.04 per unit of risk. If you would invest 13,748 in Electronic Arts on September 3, 2024 and sell it today you would earn a total of 2,789 from holding Electronic Arts or generate 20.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Taylor Maritime Investments
Performance |
| Timeline |
| Electronic Arts |
| Taylor Maritime Inve |
Electronic Arts and Taylor Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Taylor Maritime
The main advantage of trading using opposite Electronic Arts and Taylor Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Taylor Maritime 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 Taylor Maritime will offset losses from the drop in Taylor Maritime's long position.| Electronic Arts vs. The Mercantile Investment | Electronic Arts vs. Southwest Airlines Co | Electronic Arts vs. Futura Medical | Electronic Arts vs. United Airlines Holdings |
| Taylor Maritime vs. Pfeiffer Vacuum Technology | Taylor Maritime vs. DXC Technology Co | Taylor Maritime vs. Ashtead Technology Holdings | Taylor Maritime vs. Air Products Chemicals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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