Correlation Between ELECTRONIC ARTS and AGRICULTBK HADR/25
Can any of the company-specific risk be diversified away by investing in both ELECTRONIC ARTS and AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECTRONIC ARTS and AGRICULTBK HADR25 YC, you can compare the effects of market volatilities on ELECTRONIC ARTS and AGRICULTBK HADR/25 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 AGRICULTBK HADR/25. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECTRONIC ARTS and AGRICULTBK HADR/25.
Diversification Opportunities for ELECTRONIC ARTS and AGRICULTBK HADR/25
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between ELECTRONIC and AGRICULTBK is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding ELECTRONIC ARTS and AGRICULTBK HADR25 YC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGRICULTBK HADR/25 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 AGRICULTBK HADR/25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGRICULTBK HADR/25 has no effect on the direction of ELECTRONIC ARTS i.e., ELECTRONIC ARTS and AGRICULTBK HADR/25 go up and down completely randomly.
Pair Corralation between ELECTRONIC ARTS and AGRICULTBK HADR/25
Assuming the 90 days trading horizon ELECTRONIC ARTS is expected to under-perform the AGRICULTBK HADR/25. But the stock apears to be less risky and, when comparing its historical volatility, ELECTRONIC ARTS is 3.39 times less risky than AGRICULTBK HADR/25. The stock trades about -0.24 of its potential returns per unit of risk. The AGRICULTBK HADR25 YC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,229 in AGRICULTBK HADR25 YC on October 23, 2024 and sell it today you would earn a total of 21.00 from holding AGRICULTBK HADR25 YC or generate 1.71% 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. AGRICULTBK HADR25 YC
Performance |
| Timeline |
| ELECTRONIC ARTS |
| AGRICULTBK HADR/25 |
ELECTRONIC ARTS and AGRICULTBK HADR/25 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECTRONIC ARTS and AGRICULTBK HADR/25
The main advantage of trading using opposite ELECTRONIC ARTS and AGRICULTBK HADR/25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECTRONIC ARTS position performs unexpectedly, AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 will offset losses from the drop in AGRICULTBK HADR/25'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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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