Correlation Between Beowulf Mining and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Beowulf Mining 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 Beowulf Mining and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beowulf Mining and Electronic Arts, you can compare the effects of market volatilities on Beowulf Mining 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 Beowulf Mining with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beowulf Mining and Electronic Arts.
Diversification Opportunities for Beowulf Mining and Electronic Arts
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beowulf and Electronic is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Beowulf Mining and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Beowulf Mining 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 Beowulf Mining 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 Beowulf Mining i.e., Beowulf Mining and Electronic Arts go up and down completely randomly.
Pair Corralation between Beowulf Mining and Electronic Arts
Assuming the 90 days trading horizon Beowulf Mining is expected to under-perform the Electronic Arts. In addition to that, Beowulf Mining is 5.38 times more volatile than Electronic Arts. It trades about -0.07 of its total potential returns per unit of risk. Electronic Arts is currently generating about 0.07 per unit of volatility. If you would invest 13,720 in Electronic Arts on August 31, 2024 and sell it today you would earn a total of 2,647 from holding Electronic Arts or generate 19.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beowulf Mining vs. Electronic Arts
Performance |
| Timeline |
| Beowulf Mining |
| Electronic Arts |
Beowulf Mining and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beowulf Mining and Electronic Arts
The main advantage of trading using opposite Beowulf Mining and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beowulf Mining 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.The idea behind Beowulf Mining and Electronic Arts pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Electronic Arts vs. Neometals | Electronic Arts vs. Coor Service Management | Electronic Arts vs. Aeorema Communications Plc | Electronic Arts vs. JLEN Environmental Assets |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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