Correlation Between ELECTRONIC ARTS and PICKN PAY
Can any of the company-specific risk be diversified away by investing in both ELECTRONIC ARTS and PICKN PAY 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 PICKN PAY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECTRONIC ARTS and PICKN PAY STORES, you can compare the effects of market volatilities on ELECTRONIC ARTS and PICKN PAY 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 PICKN PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECTRONIC ARTS and PICKN PAY.
Diversification Opportunities for ELECTRONIC ARTS and PICKN PAY
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ELECTRONIC and PICKN is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ELECTRONIC ARTS and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES 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 PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of ELECTRONIC ARTS i.e., ELECTRONIC ARTS and PICKN PAY go up and down completely randomly.
Pair Corralation between ELECTRONIC ARTS and PICKN PAY
Assuming the 90 days trading horizon ELECTRONIC ARTS is expected to generate 0.43 times more return on investment than PICKN PAY. However, ELECTRONIC ARTS is 2.32 times less risky than PICKN PAY. It trades about 0.02 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about -0.02 per unit of risk. If you would invest 10,350 in ELECTRONIC ARTS on October 26, 2024 and sell it today you would earn a total of 926.00 from holding ELECTRONIC ARTS or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELECTRONIC ARTS vs. PICKN PAY STORES
Performance |
| Timeline |
| ELECTRONIC ARTS |
| PICKN PAY STORES |
ELECTRONIC ARTS and PICKN PAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECTRONIC ARTS and PICKN PAY
The main advantage of trading using opposite ELECTRONIC ARTS and PICKN PAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECTRONIC ARTS position performs unexpectedly, PICKN PAY 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 PICKN PAY will offset losses from the drop in PICKN PAY's long position.| ELECTRONIC ARTS vs. MICRONIC MYDATA | ELECTRONIC ARTS vs. Southwest Airlines Co | ELECTRONIC ARTS vs. Datadog | ELECTRONIC ARTS vs. Teradata Corp |
| PICKN PAY vs. Meli Hotels International | PICKN PAY vs. BW OFFSHORE LTD | PICKN PAY vs. WT OFFSHORE | PICKN PAY vs. Sunstone Hotel Investors |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |