Correlation Between Electronic Arts and KENEDIX OFFICE
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and KENEDIX OFFICE 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 KENEDIX OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and KENEDIX OFFICE INV, you can compare the effects of market volatilities on Electronic Arts and KENEDIX OFFICE 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 KENEDIX OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and KENEDIX OFFICE.
Diversification Opportunities for Electronic Arts and KENEDIX OFFICE
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electronic and KENEDIX is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV 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 KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of Electronic Arts i.e., Electronic Arts and KENEDIX OFFICE go up and down completely randomly.
Pair Corralation between Electronic Arts and KENEDIX OFFICE
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.96 times more return on investment than KENEDIX OFFICE. However, Electronic Arts is 1.04 times less risky than KENEDIX OFFICE. It trades about 0.16 of its potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about 0.04 per unit of risk. If you would invest 12,266 in Electronic Arts on August 31, 2024 and sell it today you would earn a total of 3,248 from holding Electronic Arts or generate 26.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. KENEDIX OFFICE INV
Performance |
| Timeline |
| Electronic Arts |
| KENEDIX OFFICE INV |
Electronic Arts and KENEDIX OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and KENEDIX OFFICE
The main advantage of trading using opposite Electronic Arts and KENEDIX OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, KENEDIX OFFICE 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 KENEDIX OFFICE will offset losses from the drop in KENEDIX OFFICE's long position.| Electronic Arts vs. URBAN OUTFITTERS | Electronic Arts vs. Astral Foods Limited | Electronic Arts vs. JJ SNACK FOODS | Electronic Arts vs. CarsalesCom |
| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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