Correlation Between ELECTRONIC ARTS and Khiron Life
Can any of the company-specific risk be diversified away by investing in both ELECTRONIC ARTS and Khiron Life 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 Khiron Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECTRONIC ARTS and Khiron Life Sciences, you can compare the effects of market volatilities on ELECTRONIC ARTS and Khiron Life 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 Khiron Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECTRONIC ARTS and Khiron Life.
Diversification Opportunities for ELECTRONIC ARTS and Khiron Life
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ELECTRONIC and Khiron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ELECTRONIC ARTS and Khiron Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khiron Life Sciences 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 Khiron Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khiron Life Sciences has no effect on the direction of ELECTRONIC ARTS i.e., ELECTRONIC ARTS and Khiron Life go up and down completely randomly.
Pair Corralation between ELECTRONIC ARTS and Khiron Life
Assuming the 90 days trading horizon ELECTRONIC ARTS is expected to generate 0.72 times more return on investment than Khiron Life. However, ELECTRONIC ARTS is 1.38 times less risky than Khiron Life. It trades about 0.08 of its potential returns per unit of risk. Khiron Life Sciences is currently generating about -0.03 per unit of risk. If you would invest 10,946 in ELECTRONIC ARTS on August 24, 2024 and sell it today you would earn a total of 5,062 from holding ELECTRONIC ARTS or generate 46.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.76% |
| Values | Daily Returns |
ELECTRONIC ARTS vs. Khiron Life Sciences
Performance |
| Timeline |
| ELECTRONIC ARTS |
| Khiron Life Sciences |
ELECTRONIC ARTS and Khiron Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECTRONIC ARTS and Khiron Life
The main advantage of trading using opposite ELECTRONIC ARTS and Khiron Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECTRONIC ARTS position performs unexpectedly, Khiron Life 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 Khiron Life will offset losses from the drop in Khiron Life's long position.| ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc |
| Khiron Life vs. Arrow Electronics | Khiron Life vs. UMC Electronics Co | Khiron Life vs. AOI Electronics Co | Khiron Life vs. PARKEN Sport Entertainment |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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