Correlation Between Compal Electronics and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Compal Electronics 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 Compal Electronics and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compal Electronics GDR and Electronic Arts, you can compare the effects of market volatilities on Compal Electronics 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 Compal Electronics with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Electronic Arts.
Diversification Opportunities for Compal Electronics and Electronic Arts
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and Electronic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Compal Electronics 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 Compal Electronics GDR 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 Compal Electronics i.e., Compal Electronics and Electronic Arts go up and down completely randomly.
Pair Corralation between Compal Electronics and Electronic Arts
If you would invest 15,259 in Electronic Arts on September 3, 2024 and sell it today you would earn a total of 1,278 from holding Electronic Arts or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Compal Electronics GDR vs. Electronic Arts
Performance |
| Timeline |
| Compal Electronics GDR |
| Electronic Arts |
Compal Electronics and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Electronic Arts
The main advantage of trading using opposite Compal Electronics and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics 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.| Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Hyundai Motor | Compal Electronics vs. Toyota Motor Corp |
| Electronic Arts vs. The Mercantile Investment | Electronic Arts vs. Southwest Airlines Co | Electronic Arts vs. Futura Medical | Electronic Arts vs. United Airlines Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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