Correlation Between Doubledown Interactive and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Doubledown Interactive 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 Doubledown Interactive and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doubledown Interactive Co and Electronic Arts, you can compare the effects of market volatilities on Doubledown Interactive 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 Doubledown Interactive with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubledown Interactive and Electronic Arts.
Diversification Opportunities for Doubledown Interactive and Electronic Arts
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Doubledown and Electronic is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Doubledown Interactive Co and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Doubledown Interactive 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 Doubledown Interactive Co 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 Doubledown Interactive i.e., Doubledown Interactive and Electronic Arts go up and down completely randomly.
Pair Corralation between Doubledown Interactive and Electronic Arts
Considering the 90-day investment horizon Doubledown Interactive Co is expected to generate 3.16 times more return on investment than Electronic Arts. However, Doubledown Interactive is 3.16 times more volatile than Electronic Arts. It trades about 0.04 of its potential returns per unit of risk. Electronic Arts is currently generating about 0.05 per unit of risk. If you would invest 945.00 in Doubledown Interactive Co on August 28, 2024 and sell it today you would earn a total of 445.00 from holding Doubledown Interactive Co or generate 47.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doubledown Interactive Co vs. Electronic Arts
Performance |
| Timeline |
| Doubledown Interactive |
| Electronic Arts |
Doubledown Interactive and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doubledown Interactive and Electronic Arts
The main advantage of trading using opposite Doubledown Interactive and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubledown Interactive 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.| Doubledown Interactive vs. Playtika Holding Corp | Doubledown Interactive vs. SohuCom | Doubledown Interactive vs. Playstudios | Doubledown Interactive vs. GDEV Inc |
| Electronic Arts vs. Playstudios | Electronic Arts vs. Talkspace | Electronic Arts vs. Katapult Holdings Equity | Electronic Arts vs. Aquagold International |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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