Correlation Between ELECTRONIC ARTS and Gateway Real
Can any of the company-specific risk be diversified away by investing in both ELECTRONIC ARTS and Gateway Real 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 Gateway Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECTRONIC ARTS and Gateway Real Estate, you can compare the effects of market volatilities on ELECTRONIC ARTS and Gateway Real 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 Gateway Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECTRONIC ARTS and Gateway Real.
Diversification Opportunities for ELECTRONIC ARTS and Gateway Real
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELECTRONIC and Gateway is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ELECTRONIC ARTS and Gateway Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Real Estate 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 Gateway Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Real Estate has no effect on the direction of ELECTRONIC ARTS i.e., ELECTRONIC ARTS and Gateway Real go up and down completely randomly.
Pair Corralation between ELECTRONIC ARTS and Gateway Real
Assuming the 90 days trading horizon ELECTRONIC ARTS is expected to generate 16.86 times less return on investment than Gateway Real. But when comparing it to its historical volatility, ELECTRONIC ARTS is 13.66 times less risky than Gateway Real. It trades about 0.03 of its potential returns per unit of risk. Gateway Real Estate is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 342.00 in Gateway Real Estate on October 17, 2024 and sell it today you would lose (259.00) from holding Gateway Real Estate or give up 75.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELECTRONIC ARTS vs. Gateway Real Estate
Performance |
| Timeline |
| ELECTRONIC ARTS |
| Gateway Real Estate |
ELECTRONIC ARTS and Gateway Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECTRONIC ARTS and Gateway Real
The main advantage of trading using opposite ELECTRONIC ARTS and Gateway Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECTRONIC ARTS position performs unexpectedly, Gateway Real 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 Gateway Real will offset losses from the drop in Gateway Real's long position.| ELECTRONIC ARTS vs. Dalata Hotel Group | ELECTRONIC ARTS vs. NH HOTEL GROUP | ELECTRONIC ARTS vs. Meli Hotels International | ELECTRONIC ARTS vs. WisdomTree Investments |
| Gateway Real vs. Forsys Metals Corp | Gateway Real vs. ANTA SPORTS PRODUCT | Gateway Real vs. WIZZ AIR HLDGUNSPADR4 | Gateway Real vs. Air Transport Services |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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