Correlation Between ELECTRONIC ARTS and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both ELECTRONIC ARTS and LPKF Laser 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 LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECTRONIC ARTS and LPKF Laser Electronics, you can compare the effects of market volatilities on ELECTRONIC ARTS and LPKF Laser 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 LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECTRONIC ARTS and LPKF Laser.
Diversification Opportunities for ELECTRONIC ARTS and LPKF Laser
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between ELECTRONIC and LPKF is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ELECTRONIC ARTS and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics 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 LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of ELECTRONIC ARTS i.e., ELECTRONIC ARTS and LPKF Laser go up and down completely randomly.
Pair Corralation between ELECTRONIC ARTS and LPKF Laser
Assuming the 90 days trading horizon ELECTRONIC ARTS is expected to generate 1.38 times more return on investment than LPKF Laser. However, ELECTRONIC ARTS is 1.38 times more volatile than LPKF Laser Electronics. It trades about 0.55 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.2 per unit of risk. If you would invest 13,280 in ELECTRONIC ARTS on August 30, 2024 and sell it today you would earn a total of 2,400 from holding ELECTRONIC ARTS or generate 18.07% 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. LPKF Laser Electronics
Performance |
| Timeline |
| ELECTRONIC ARTS |
| LPKF Laser Electronics |
ELECTRONIC ARTS and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECTRONIC ARTS and LPKF Laser
The main advantage of trading using opposite ELECTRONIC ARTS and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECTRONIC ARTS position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser's long position.| ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Superior Plus Corp | ELECTRONIC ARTS vs. SIVERS SEMICONDUCTORS AB |
| LPKF Laser vs. ABB | LPKF Laser vs. Superior Plus Corp | LPKF Laser vs. NMI Holdings | LPKF Laser vs. SIVERS SEMICONDUCTORS AB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |