Correlation Between Electronic Arts and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Canlan Ice 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 Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Canlan Ice Sports, you can compare the effects of market volatilities on Electronic Arts and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Canlan Ice.
Diversification Opportunities for Electronic Arts and Canlan Ice
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Electronic and Canlan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Electronic Arts i.e., Electronic Arts and Canlan Ice go up and down completely randomly.
Pair Corralation between Electronic Arts and Canlan Ice
Allowing for the 90-day total investment horizon Electronic Arts is expected to generate 11.44 times more return on investment than Canlan Ice. However, Electronic Arts is 11.44 times more volatile than Canlan Ice Sports. It trades about 0.05 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.13 per unit of risk. If you would invest 12,611 in Electronic Arts on August 27, 2024 and sell it today you would earn a total of 4,056 from holding Electronic Arts or generate 32.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Canlan Ice Sports
Performance |
| Timeline |
| Electronic Arts |
| Canlan Ice Sports |
Electronic Arts and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Canlan Ice
The main advantage of trading using opposite Electronic Arts and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Electronic Arts vs. Playstudios | Electronic Arts vs. Talkspace | Electronic Arts vs. Katapult Holdings Equity | Electronic Arts vs. Aquagold International |
| Canlan Ice vs. HUMANA INC | Canlan Ice vs. Aquagold International | Canlan Ice vs. Barloworld Ltd ADR | Canlan Ice vs. Morningstar Unconstrained Allocation |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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