Correlation Between SHIP HEALTHCARE and ELECTRONIC ARTS
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and ELECTRONIC ARTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and ELECTRONIC ARTS, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and ELECTRONIC ARTS.
Diversification Opportunities for SHIP HEALTHCARE and ELECTRONIC ARTS
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SHIP and ELECTRONIC is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and ELECTRONIC ARTS go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and ELECTRONIC ARTS
Assuming the 90 days horizon SHIP HEALTHCARE is expected to generate 4.46 times less return on investment than ELECTRONIC ARTS. In addition to that, SHIP HEALTHCARE is 1.19 times more volatile than ELECTRONIC ARTS. It trades about 0.03 of its total potential returns per unit of risk. ELECTRONIC ARTS is currently generating about 0.16 per unit of volatility. If you would invest 13,569 in ELECTRONIC ARTS on September 3, 2024 and sell it today you would earn a total of 1,851 from holding ELECTRONIC ARTS or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. ELECTRONIC ARTS
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| ELECTRONIC ARTS |
SHIP HEALTHCARE and ELECTRONIC ARTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and ELECTRONIC ARTS
The main advantage of trading using opposite SHIP HEALTHCARE and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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's long position.| SHIP HEALTHCARE vs. DEVRY EDUCATION GRP | SHIP HEALTHCARE vs. Titan Machinery | SHIP HEALTHCARE vs. CHINA EDUCATION GROUP | SHIP HEALTHCARE vs. United Utilities Group |
| ELECTRONIC ARTS vs. FEMALE HEALTH | ELECTRONIC ARTS vs. DiamondRock Hospitality | ELECTRONIC ARTS vs. SHIP HEALTHCARE HLDGINC | ELECTRONIC ARTS vs. YOOMA WELLNESS INC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |