Correlation Between Electronic Arts and Skillz Platform
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Skillz Platform 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 Skillz Platform into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Skillz Platform, you can compare the effects of market volatilities on Electronic Arts and Skillz Platform 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 Skillz Platform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Skillz Platform.
Diversification Opportunities for Electronic Arts and Skillz Platform
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electronic and Skillz is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Skillz Platform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skillz Platform 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 Skillz Platform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skillz Platform has no effect on the direction of Electronic Arts i.e., Electronic Arts and Skillz Platform go up and down completely randomly.
Pair Corralation between Electronic Arts and Skillz Platform
Allowing for the 90-day total investment horizon Electronic Arts is expected to generate 0.3 times more return on investment than Skillz Platform. However, Electronic Arts is 3.38 times less risky than Skillz Platform. It trades about 0.65 of its potential returns per unit of risk. Skillz Platform is currently generating about -0.05 per unit of risk. If you would invest 14,418 in Electronic Arts on August 27, 2024 and sell it today you would earn a total of 2,249 from holding Electronic Arts or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Skillz Platform
Performance |
| Timeline |
| Electronic Arts |
| Skillz Platform |
Electronic Arts and Skillz Platform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Skillz Platform
The main advantage of trading using opposite Electronic Arts and Skillz Platform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Skillz Platform 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 Skillz Platform will offset losses from the drop in Skillz Platform's long position.| Electronic Arts vs. Playstudios | Electronic Arts vs. Talkspace | Electronic Arts vs. Katapult Holdings Equity | Electronic Arts vs. Aquagold International |
| Skillz Platform vs. Bilibili | Skillz Platform vs. Take Two Interactive Software | Skillz Platform vs. NetEase | Skillz Platform vs. Roblox Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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