Correlation Between Electronic Arts and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on Electronic Arts and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and KIMBALL ELECTRONICS.
Diversification Opportunities for Electronic Arts and KIMBALL ELECTRONICS
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Electronic and KIMBALL is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL 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 KIMBALL ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBALL ELECTRONICS has no effect on the direction of Electronic Arts i.e., Electronic Arts and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between Electronic Arts and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.28 times more return on investment than KIMBALL ELECTRONICS. However, Electronic Arts is 3.59 times less risky than KIMBALL ELECTRONICS. It trades about 0.53 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about 0.14 per unit of risk. If you would invest 13,462 in Electronic Arts on August 30, 2024 and sell it today you would earn a total of 2,028 from holding Electronic Arts or generate 15.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| Electronic Arts |
| KIMBALL ELECTRONICS |
Electronic Arts and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and KIMBALL ELECTRONICS
The main advantage of trading using opposite Electronic Arts and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS will offset losses from the drop in KIMBALL ELECTRONICS'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 |
| KIMBALL ELECTRONICS vs. Superior Plus Corp | KIMBALL ELECTRONICS vs. SIVERS SEMICONDUCTORS AB | KIMBALL ELECTRONICS vs. Talanx AG | KIMBALL ELECTRONICS vs. 2G ENERGY |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |