Correlation Between Electronic Arts and GLADSTONE LAND
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and GLADSTONE LAND 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 GLADSTONE LAND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and GLADSTONE LAND L 001, you can compare the effects of market volatilities on Electronic Arts and GLADSTONE LAND 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 GLADSTONE LAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and GLADSTONE LAND.
Diversification Opportunities for Electronic Arts and GLADSTONE LAND
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electronic and GLADSTONE is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and GLADSTONE LAND L 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLADSTONE LAND L 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 GLADSTONE LAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLADSTONE LAND L has no effect on the direction of Electronic Arts i.e., Electronic Arts and GLADSTONE LAND go up and down completely randomly.
Pair Corralation between Electronic Arts and GLADSTONE LAND
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.73 times more return on investment than GLADSTONE LAND. However, Electronic Arts is 1.37 times less risky than GLADSTONE LAND. It trades about 0.12 of its potential returns per unit of risk. GLADSTONE LAND L 001 is currently generating about -0.03 per unit of risk. If you would invest 10,735 in Electronic Arts on September 12, 2024 and sell it today you would earn a total of 5,131 from holding Electronic Arts or generate 47.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 87.2% |
| Values | Daily Returns |
Electronic Arts vs. GLADSTONE LAND L 001
Performance |
| Timeline |
| Electronic Arts |
| GLADSTONE LAND L |
Electronic Arts and GLADSTONE LAND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and GLADSTONE LAND
The main advantage of trading using opposite Electronic Arts and GLADSTONE LAND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, GLADSTONE LAND 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 GLADSTONE LAND will offset losses from the drop in GLADSTONE LAND's long position.| Electronic Arts vs. Apple Inc | Electronic Arts vs. Apple Inc | Electronic Arts vs. Apple Inc | Electronic Arts vs. Apple Inc |
| GLADSTONE LAND vs. Methode Electronics | GLADSTONE LAND vs. AOI Electronics Co | GLADSTONE LAND vs. Align Technology | GLADSTONE LAND 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |