Correlation Between Electronic Arts and METISA Metalrgica
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and METISA Metalrgica 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 METISA Metalrgica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and METISA Metalrgica Timboense, you can compare the effects of market volatilities on Electronic Arts and METISA Metalrgica 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 METISA Metalrgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and METISA Metalrgica.
Diversification Opportunities for Electronic Arts and METISA Metalrgica
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electronic and METISA is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and METISA Metalrgica Timboense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METISA Metalrgica 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 METISA Metalrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METISA Metalrgica has no effect on the direction of Electronic Arts i.e., Electronic Arts and METISA Metalrgica go up and down completely randomly.
Pair Corralation between Electronic Arts and METISA Metalrgica
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.44 times more return on investment than METISA Metalrgica. However, Electronic Arts is 2.25 times less risky than METISA Metalrgica. It trades about 0.57 of its potential returns per unit of risk. METISA Metalrgica Timboense is currently generating about -0.02 per unit of risk. If you would invest 41,952 in Electronic Arts on August 30, 2024 and sell it today you would earn a total of 5,691 from holding Electronic Arts or generate 13.57% 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. METISA Metalrgica Timboense
Performance |
| Timeline |
| Electronic Arts |
| METISA Metalrgica |
Electronic Arts and METISA Metalrgica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and METISA Metalrgica
The main advantage of trading using opposite Electronic Arts and METISA Metalrgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, METISA Metalrgica 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 METISA Metalrgica will offset losses from the drop in METISA Metalrgica's long position.| Electronic Arts vs. Bemobi Mobile Tech | Electronic Arts vs. Waste Management | Electronic Arts vs. Take Two Interactive Software | Electronic Arts vs. Bank of America |
| METISA Metalrgica vs. Recrusul SA | METISA Metalrgica vs. Randon SA Implementos | METISA Metalrgica vs. Electro Ao Altona |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |