Correlation Between Beeks Trading and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Beeks Trading 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 Beeks Trading and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beeks Trading and Electronic Arts, you can compare the effects of market volatilities on Beeks Trading 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 Beeks Trading with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks Trading and Electronic Arts.
Diversification Opportunities for Beeks Trading and Electronic Arts
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Beeks and Electronic is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Beeks Trading 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 Beeks Trading 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 Beeks Trading i.e., Beeks Trading and Electronic Arts go up and down completely randomly.
Pair Corralation between Beeks Trading and Electronic Arts
Assuming the 90 days trading horizon Beeks Trading is expected to generate 3.2 times more return on investment than Electronic Arts. However, Beeks Trading is 3.2 times more volatile than Electronic Arts. It trades about 0.13 of its potential returns per unit of risk. Electronic Arts is currently generating about 0.07 per unit of risk. If you would invest 10,250 in Beeks Trading on September 4, 2024 and sell it today you would earn a total of 16,450 from holding Beeks Trading or generate 160.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Beeks Trading vs. Electronic Arts
Performance |
| Timeline |
| Beeks Trading |
| Electronic Arts |
Beeks Trading and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beeks Trading and Electronic Arts
The main advantage of trading using opposite Beeks Trading and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading 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.| Beeks Trading vs. Diversified Energy | Beeks Trading vs. Playtech Plc | Beeks Trading vs. Aurora Investment Trust | Beeks Trading vs. Universal Display Corp |
| Electronic Arts vs. Centaur Media | Electronic Arts vs. Oakley Capital Investments | Electronic Arts vs. Live Nation Entertainment | Electronic Arts vs. New Residential Investment |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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