Correlation Between Electronic Arts and Apollo Medical
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Apollo Medical 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 Apollo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Apollo Medical Holdings, you can compare the effects of market volatilities on Electronic Arts and Apollo Medical 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 Apollo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Apollo Medical.
Diversification Opportunities for Electronic Arts and Apollo Medical
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electronic and Apollo is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Apollo Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Medical 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 Apollo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Medical Holdings has no effect on the direction of Electronic Arts i.e., Electronic Arts and Apollo Medical go up and down completely randomly.
Pair Corralation between Electronic Arts and Apollo Medical
Assuming the 90 days trading horizon Electronic Arts is expected to under-perform the Apollo Medical. In addition to that, Electronic Arts is 1.44 times more volatile than Apollo Medical Holdings. It trades about -0.17 of its total potential returns per unit of risk. Apollo Medical Holdings is currently generating about 0.22 per unit of volatility. If you would invest 3,020 in Apollo Medical Holdings on November 3, 2024 and sell it today you would earn a total of 460.00 from holding Apollo Medical Holdings or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Apollo Medical Holdings
Performance |
| Timeline |
| Electronic Arts |
| Apollo Medical Holdings |
Electronic Arts and Apollo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Apollo Medical
The main advantage of trading using opposite Electronic Arts and Apollo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Apollo Medical 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 Apollo Medical will offset losses from the drop in Apollo Medical's long position.| Electronic Arts vs. China National Building | Electronic Arts vs. VULCAN MATERIALS | Electronic Arts vs. GOODYEAR T RUBBER | Electronic Arts vs. Goodyear Tire Rubber |
| Apollo Medical vs. X FAB Silicon Foundries | Apollo Medical vs. Soken Chemical Engineering | Apollo Medical vs. INDO RAMA SYNTHETIC | Apollo Medical vs. TRI CHEMICAL LABORATINC |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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