Correlation Between Electronic Arts and Danske Bank
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Danske Bank 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 Danske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Danske Bank AS, you can compare the effects of market volatilities on Electronic Arts and Danske Bank 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 Danske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Danske Bank.
Diversification Opportunities for Electronic Arts and Danske Bank
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electronic and Danske is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Danske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Bank AS 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 Danske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Bank AS has no effect on the direction of Electronic Arts i.e., Electronic Arts and Danske Bank go up and down completely randomly.
Pair Corralation between Electronic Arts and Danske Bank
Allowing for the 90-day total investment horizon Electronic Arts is expected to generate 3.83 times less return on investment than Danske Bank. But when comparing it to its historical volatility, Electronic Arts is 1.19 times less risky than Danske Bank. It trades about 0.02 of its potential returns per unit of risk. Danske Bank AS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 949.00 in Danske Bank AS on November 2, 2024 and sell it today you would earn a total of 583.00 from holding Danske Bank AS or generate 61.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Danske Bank AS
Performance |
| Timeline |
| Electronic Arts |
| Danske Bank AS |
Electronic Arts and Danske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Danske Bank
The main advantage of trading using opposite Electronic Arts and Danske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Danske Bank 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 Danske Bank will offset losses from the drop in Danske Bank's long position.| Electronic Arts vs. Nintendo Co ADR | Electronic Arts vs. Roblox Corp | Electronic Arts vs. NetEase | Electronic Arts vs. Take Two Interactive Software |
| Danske Bank vs. Israel Discount Bank | Danske Bank vs. Baraboo Bancorporation | Danske Bank vs. Schweizerische Nationalbank | Danske Bank vs. Jyske Bank AS |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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