Correlation Between ELECTRONIC ARTS and EnBW Energie
Can any of the company-specific risk be diversified away by investing in both ELECTRONIC ARTS and EnBW Energie 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 EnBW Energie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECTRONIC ARTS and EnBW Energie Baden Wrttemberg, you can compare the effects of market volatilities on ELECTRONIC ARTS and EnBW Energie 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 EnBW Energie. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECTRONIC ARTS and EnBW Energie.
Diversification Opportunities for ELECTRONIC ARTS and EnBW Energie
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ELECTRONIC and EnBW is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ELECTRONIC ARTS and EnBW Energie Baden Wrttemberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnBW Energie Baden 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 EnBW Energie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnBW Energie Baden has no effect on the direction of ELECTRONIC ARTS i.e., ELECTRONIC ARTS and EnBW Energie go up and down completely randomly.
Pair Corralation between ELECTRONIC ARTS and EnBW Energie
Assuming the 90 days trading horizon ELECTRONIC ARTS is expected to generate 0.82 times more return on investment than EnBW Energie. However, ELECTRONIC ARTS is 1.22 times less risky than EnBW Energie. It trades about 0.21 of its potential returns per unit of risk. EnBW Energie Baden Wrttemberg is currently generating about -0.21 per unit of risk. If you would invest 14,920 in ELECTRONIC ARTS on September 13, 2024 and sell it today you would earn a total of 758.00 from holding ELECTRONIC ARTS or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ELECTRONIC ARTS vs. EnBW Energie Baden Wrttemberg
Performance |
| Timeline |
| ELECTRONIC ARTS |
| EnBW Energie Baden |
ELECTRONIC ARTS and EnBW Energie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECTRONIC ARTS and EnBW Energie
The main advantage of trading using opposite ELECTRONIC ARTS and EnBW Energie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECTRONIC ARTS position performs unexpectedly, EnBW Energie 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 EnBW Energie will offset losses from the drop in EnBW Energie's long position.| ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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