Correlation Between Electronic Arts and ELECTRONIC ARTS
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and ELECTRONIC ARTS 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 ELECTRONIC ARTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and ELECTRONIC ARTS, you can compare the effects of market volatilities on Electronic Arts and ELECTRONIC ARTS 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 ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and ELECTRONIC ARTS.
Diversification Opportunities for Electronic Arts and ELECTRONIC ARTS
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Electronic and ELECTRONIC is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS 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 ELECTRONIC ARTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECTRONIC ARTS has no effect on the direction of Electronic Arts i.e., Electronic Arts and ELECTRONIC ARTS go up and down completely randomly.
Pair Corralation between Electronic Arts and ELECTRONIC ARTS
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.81 times more return on investment than ELECTRONIC ARTS. However, Electronic Arts is 1.23 times less risky than ELECTRONIC ARTS. It trades about 0.74 of its potential returns per unit of risk. ELECTRONIC ARTS is currently generating about 0.58 per unit of risk. If you would invest 13,326 in Electronic Arts on August 28, 2024 and sell it today you would earn a total of 2,504 from holding Electronic Arts or generate 18.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. ELECTRONIC ARTS
Performance |
| Timeline |
| Electronic Arts |
| ELECTRONIC ARTS |
Electronic Arts and ELECTRONIC ARTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and ELECTRONIC ARTS
The main advantage of trading using opposite Electronic Arts and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, ELECTRONIC ARTS 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 ELECTRONIC ARTS will offset losses from the drop in ELECTRONIC ARTS's long position.| Electronic Arts vs. Grand Canyon Education | Electronic Arts vs. Microchip Technology Incorporated | Electronic Arts vs. Check Point Software | Electronic Arts vs. EMBARK EDUCATION LTD |
| ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Apple Inc | ELECTRONIC ARTS vs. Microsoft |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| 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 | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |