Correlation Between ELECTRONIC ARTS and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both ELECTRONIC ARTS and TIMES CHINA 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 TIMES CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELECTRONIC ARTS and TIMES CHINA HLDGS, you can compare the effects of market volatilities on ELECTRONIC ARTS and TIMES CHINA 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 TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELECTRONIC ARTS and TIMES CHINA.
Diversification Opportunities for ELECTRONIC ARTS and TIMES CHINA
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between ELECTRONIC and TIMES is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ELECTRONIC ARTS and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of ELECTRONIC ARTS i.e., ELECTRONIC ARTS and TIMES CHINA go up and down completely randomly.
Pair Corralation between ELECTRONIC ARTS and TIMES CHINA
Assuming the 90 days trading horizon ELECTRONIC ARTS is expected to generate 0.17 times more return on investment than TIMES CHINA. However, ELECTRONIC ARTS is 5.81 times less risky than TIMES CHINA. It trades about -0.25 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about -0.18 per unit of risk. If you would invest 14,198 in ELECTRONIC ARTS on October 23, 2024 and sell it today you would lose (486.00) from holding ELECTRONIC ARTS or give up 3.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
ELECTRONIC ARTS vs. TIMES CHINA HLDGS
Performance |
| Timeline |
| ELECTRONIC ARTS |
| TIMES CHINA HLDGS |
ELECTRONIC ARTS and TIMES CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELECTRONIC ARTS and TIMES CHINA
The main advantage of trading using opposite ELECTRONIC ARTS and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELECTRONIC ARTS position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.| ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc |
| TIMES CHINA vs. Park Hotels Resorts | TIMES CHINA vs. Delta Electronics Public | TIMES CHINA vs. Nanjing Panda Electronics | TIMES CHINA vs. ELECTRONIC ARTS |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |