Correlation Between ELECTRONIC ARTS and FUTURE GAMING
Can any of the company-specific risk be diversified away by investing in both ELECTRONIC ARTS and FUTURE GAMING 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 FUTURE GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECTRONIC ARTS and FUTURE GAMING GRP, you can compare the effects of market volatilities on ELECTRONIC ARTS and FUTURE GAMING 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 FUTURE GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECTRONIC ARTS and FUTURE GAMING.
Diversification Opportunities for ELECTRONIC ARTS and FUTURE GAMING
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELECTRONIC and FUTURE is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ELECTRONIC ARTS and FUTURE GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUTURE GAMING GRP 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 FUTURE GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUTURE GAMING GRP has no effect on the direction of ELECTRONIC ARTS i.e., ELECTRONIC ARTS and FUTURE GAMING go up and down completely randomly.
Pair Corralation between ELECTRONIC ARTS and FUTURE GAMING
Assuming the 90 days trading horizon ELECTRONIC ARTS is expected to generate 0.45 times more return on investment than FUTURE GAMING. However, ELECTRONIC ARTS is 2.23 times less risky than FUTURE GAMING. It trades about 0.58 of its potential returns per unit of risk. FUTURE GAMING GRP is currently generating about -0.01 per unit of risk. If you would invest 13,484 in ELECTRONIC ARTS on August 27, 2024 and sell it today you would earn a total of 2,456 from holding ELECTRONIC ARTS or generate 18.21% 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. FUTURE GAMING GRP
Performance |
| Timeline |
| ELECTRONIC ARTS |
| FUTURE GAMING GRP |
ELECTRONIC ARTS and FUTURE GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECTRONIC ARTS and FUTURE GAMING
The main advantage of trading using opposite ELECTRONIC ARTS and FUTURE GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECTRONIC ARTS position performs unexpectedly, FUTURE GAMING 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 FUTURE GAMING will offset losses from the drop in FUTURE GAMING's long position.| ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Microsoft |
| FUTURE GAMING vs. Evolution AB | FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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