Correlation Between Electronic Arts and Saga Communications
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Saga Communications 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 Saga Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Saga Communications, you can compare the effects of market volatilities on Electronic Arts and Saga Communications 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 Saga Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Saga Communications.
Diversification Opportunities for Electronic Arts and Saga Communications
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electronic and Saga is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Saga Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Communications 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 Saga Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Communications has no effect on the direction of Electronic Arts i.e., Electronic Arts and Saga Communications go up and down completely randomly.
Pair Corralation between Electronic Arts and Saga Communications
If you would invest 0.00 in Saga Communications on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Saga Communications or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Saga Communications
Performance |
| Timeline |
| Electronic Arts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Saga Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Electronic Arts and Saga Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Saga Communications
The main advantage of trading using opposite Electronic Arts and Saga Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Saga Communications 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 Saga Communications will offset losses from the drop in Saga Communications' long position.The idea behind Electronic Arts and Saga Communications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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