Correlation Between Hua Hong and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Hua Hong and Electronic Arts 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 Hua Hong and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and Electronic Arts, you can compare the effects of market volatilities on Hua Hong and Electronic Arts 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 Hua Hong with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and Electronic Arts.
Diversification Opportunities for Hua Hong and Electronic Arts
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hua and Electronic is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Hua Hong 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 Hua Hong Semiconductor are associated (or correlated) with Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of Hua Hong i.e., Hua Hong and Electronic Arts go up and down completely randomly.
Pair Corralation between Hua Hong and Electronic Arts
Assuming the 90 days horizon Hua Hong is expected to generate 10.67 times less return on investment than Electronic Arts. In addition to that, Hua Hong is 2.71 times more volatile than Electronic Arts. It trades about 0.0 of its total potential returns per unit of risk. Electronic Arts is currently generating about 0.04 per unit of volatility. If you would invest 11,595 in Electronic Arts on October 11, 2024 and sell it today you would earn a total of 2,393 from holding Electronic Arts or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.6% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. Electronic Arts
Performance |
| Timeline |
| Hua Hong Semiconductor |
| Electronic Arts |
Hua Hong and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and Electronic Arts
The main advantage of trading using opposite Hua Hong and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' long position.| Hua Hong vs. Electronic Arts | Hua Hong vs. Nucletron Electronic Aktiengesellschaft | Hua Hong vs. STMICROELECTRONICS | Hua Hong vs. Inspire Medical Systems |
| Electronic Arts vs. Luckin Coffee | Electronic Arts vs. Astral Foods Limited | Electronic Arts vs. Ultra Clean Holdings | Electronic Arts vs. CN MODERN DAIRY |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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