Correlation Between Electronic Arts and Academy Sports
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Academy Sports 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 Electronic Arts and Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Academy Sports Outdoors, you can compare the effects of market volatilities on Electronic Arts and Academy Sports 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 Electronic Arts with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Academy Sports.
Diversification Opportunities for Electronic Arts and Academy Sports
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electronic and Academy is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors and Electronic Arts 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 Electronic Arts are associated (or correlated) with Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of Electronic Arts i.e., Electronic Arts and Academy Sports go up and down completely randomly.
Pair Corralation between Electronic Arts and Academy Sports
Allowing for the 90-day total investment horizon Electronic Arts is expected to generate 0.51 times more return on investment than Academy Sports. However, Electronic Arts is 1.97 times less risky than Academy Sports. It trades about 0.18 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about -0.06 per unit of risk. If you would invest 13,169 in Electronic Arts on August 24, 2024 and sell it today you would earn a total of 3,628 from holding Electronic Arts or generate 27.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Academy Sports Outdoors
Performance |
| Timeline |
| Electronic Arts |
| Academy Sports Outdoors |
Electronic Arts and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Academy Sports
The main advantage of trading using opposite Electronic Arts and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Academy Sports 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 Academy Sports will offset losses from the drop in Academy Sports' long position.| Electronic Arts vs. Nintendo Co ADR | Electronic Arts vs. Roblox Corp | Electronic Arts vs. NetEase | Electronic Arts vs. Take Two Interactive Software |
| Academy Sports vs. Winmark | Academy Sports vs. Arko Corp | Academy Sports vs. ABIVAX Socit Anonyme | Academy Sports vs. SCOR PK |
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 Stocks Directory module to find actively traded stocks across global markets.
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