Correlation Between Dolphin Entertainment and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Dolphin Entertainment 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 Dolphin Entertainment and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolphin Entertainment and Electronic Arts, you can compare the effects of market volatilities on Dolphin Entertainment 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 Dolphin Entertainment with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Entertainment and Electronic Arts.
Diversification Opportunities for Dolphin Entertainment and Electronic Arts
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dolphin and Electronic is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Dolphin Entertainment 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 Dolphin Entertainment 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 Dolphin Entertainment i.e., Dolphin Entertainment and Electronic Arts go up and down completely randomly.
Pair Corralation between Dolphin Entertainment and Electronic Arts
Given the investment horizon of 90 days Dolphin Entertainment is expected to under-perform the Electronic Arts. In addition to that, Dolphin Entertainment is 2.96 times more volatile than Electronic Arts. It trades about -0.16 of its total potential returns per unit of risk. Electronic Arts is currently generating about 0.44 per unit of volatility. If you would invest 14,545 in Electronic Arts on August 30, 2024 and sell it today you would earn a total of 1,765 from holding Electronic Arts or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dolphin Entertainment vs. Electronic Arts
Performance |
| Timeline |
| Dolphin Entertainment |
| Electronic Arts |
Dolphin Entertainment and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolphin Entertainment and Electronic Arts
The main advantage of trading using opposite Dolphin Entertainment and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Entertainment 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.| Dolphin Entertainment vs. Hall of Fame | Dolphin Entertainment vs. Wisekey International Holding | Dolphin Entertainment vs. Oriental Culture Holding | Dolphin Entertainment vs. HUMANA INC |
| Electronic Arts vs. Nintendo Co ADR | Electronic Arts vs. Roblox Corp | Electronic Arts vs. NetEase | Electronic Arts vs. Take Two Interactive Software |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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