Correlation Between DONGJIANG ENVIRONMENTAL and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGJIANG ENVIRONMENTAL H and Electronic Arts, you can compare the effects of market volatilities on DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGJIANG ENVIRONMENTAL and Electronic Arts.
Diversification Opportunities for DONGJIANG ENVIRONMENTAL and Electronic Arts
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DONGJIANG and Electronic is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding DONGJIANG ENVIRONMENTAL H and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL H 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 DONGJIANG ENVIRONMENTAL i.e., DONGJIANG ENVIRONMENTAL and Electronic Arts go up and down completely randomly.
Pair Corralation between DONGJIANG ENVIRONMENTAL and Electronic Arts
Assuming the 90 days horizon DONGJIANG ENVIRONMENTAL H is expected to under-perform the Electronic Arts. In addition to that, DONGJIANG ENVIRONMENTAL is 2.55 times more volatile than Electronic Arts. It trades about -0.2 of its total potential returns per unit of risk. Electronic Arts is currently generating about -0.25 per unit of volatility. If you would invest 15,349 in Electronic Arts on October 16, 2024 and sell it today you would lose (1,605) from holding Electronic Arts or give up 10.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGJIANG ENVIRONMENTAL H vs. Electronic Arts
Performance |
| Timeline |
| DONGJIANG ENVIRONMENTAL |
| Electronic Arts |
DONGJIANG ENVIRONMENTAL and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGJIANG ENVIRONMENTAL and Electronic Arts
The main advantage of trading using opposite DONGJIANG ENVIRONMENTAL and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGJIANG ENVIRONMENTAL 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.| DONGJIANG ENVIRONMENTAL vs. QUEEN S ROAD | DONGJIANG ENVIRONMENTAL vs. Scottish Mortgage Investment | DONGJIANG ENVIRONMENTAL vs. PennantPark Investment | DONGJIANG ENVIRONMENTAL vs. Chuangs China Investments |
| Electronic Arts vs. PT Steel Pipe | Electronic Arts vs. DONGJIANG ENVIRONMENTAL H | Electronic Arts vs. Xiwang Special Steel | Electronic Arts vs. SENECA FOODS A |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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