Correlation Between ELECTRONIC ARTS and Eversource Energy
Can any of the company-specific risk be diversified away by investing in both ELECTRONIC ARTS and Eversource Energy 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 Eversource Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECTRONIC ARTS and Eversource Energy, you can compare the effects of market volatilities on ELECTRONIC ARTS and Eversource Energy 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 Eversource Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECTRONIC ARTS and Eversource Energy.
Diversification Opportunities for ELECTRONIC ARTS and Eversource Energy
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between ELECTRONIC and Eversource is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ELECTRONIC ARTS and Eversource Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eversource Energy 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 Eversource Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eversource Energy has no effect on the direction of ELECTRONIC ARTS i.e., ELECTRONIC ARTS and Eversource Energy go up and down completely randomly.
Pair Corralation between ELECTRONIC ARTS and Eversource Energy
Assuming the 90 days trading horizon ELECTRONIC ARTS is expected to under-perform the Eversource Energy. But the stock apears to be less risky and, when comparing its historical volatility, ELECTRONIC ARTS is 1.38 times less risky than Eversource Energy. The stock trades about -0.23 of its potential returns per unit of risk. The Eversource Energy is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,450 in Eversource Energy on October 22, 2024 and sell it today you would earn a total of 150.00 from holding Eversource Energy or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
ELECTRONIC ARTS vs. Eversource Energy
Performance |
| Timeline |
| ELECTRONIC ARTS |
| Eversource Energy |
ELECTRONIC ARTS and Eversource Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECTRONIC ARTS and Eversource Energy
The main advantage of trading using opposite ELECTRONIC ARTS and Eversource Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECTRONIC ARTS position performs unexpectedly, Eversource Energy 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 Eversource Energy will offset losses from the drop in Eversource Energy's long position.| ELECTRONIC ARTS vs. MGIC INVESTMENT | ELECTRONIC ARTS vs. GOODYEAR T RUBBER | ELECTRONIC ARTS vs. ECHO INVESTMENT ZY | ELECTRONIC ARTS vs. Materialise NV |
| Eversource Energy vs. Scientific Games | Eversource Energy vs. CONTAGIOUS GAMING INC | Eversource Energy vs. HOCHSCHILD MINING | Eversource Energy vs. CODERE ONLINE LUX |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |