Correlation Between ELECTRONIC ARTS and Look Holdings
Can any of the company-specific risk be diversified away by investing in both ELECTRONIC ARTS and Look Holdings 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 Look Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECTRONIC ARTS and Look Holdings, you can compare the effects of market volatilities on ELECTRONIC ARTS and Look Holdings 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 Look Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECTRONIC ARTS and Look Holdings.
Diversification Opportunities for ELECTRONIC ARTS and Look Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ELECTRONIC and Look is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ELECTRONIC ARTS and Look Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Look Holdings 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 Look Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Look Holdings has no effect on the direction of ELECTRONIC ARTS i.e., ELECTRONIC ARTS and Look Holdings go up and down completely randomly.
Pair Corralation between ELECTRONIC ARTS and Look Holdings
If you would invest 13,026 in ELECTRONIC ARTS on September 12, 2024 and sell it today you would earn a total of 2,606 from holding ELECTRONIC ARTS or generate 20.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ELECTRONIC ARTS vs. Look Holdings
Performance |
| Timeline |
| ELECTRONIC ARTS |
| Look Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ELECTRONIC ARTS and Look Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECTRONIC ARTS and Look Holdings
The main advantage of trading using opposite ELECTRONIC ARTS and Look Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECTRONIC ARTS position performs unexpectedly, Look Holdings 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 Look Holdings will offset losses from the drop in Look Holdings' 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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