Correlation Between Electronic Arts and FIRST SHIP
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and FIRST SHIP 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 FIRST SHIP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and FIRST SHIP LEASE, you can compare the effects of market volatilities on Electronic Arts and FIRST SHIP 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 FIRST SHIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and FIRST SHIP.
Diversification Opportunities for Electronic Arts and FIRST SHIP
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electronic and FIRST is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and FIRST SHIP LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SHIP LEASE 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 FIRST SHIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SHIP LEASE has no effect on the direction of Electronic Arts i.e., Electronic Arts and FIRST SHIP go up and down completely randomly.
Pair Corralation between Electronic Arts and FIRST SHIP
Assuming the 90 days trading horizon Electronic Arts is expected to under-perform the FIRST SHIP. But the stock apears to be less risky and, when comparing its historical volatility, Electronic Arts is 1.19 times less risky than FIRST SHIP. The stock trades about -0.11 of its potential returns per unit of risk. The FIRST SHIP LEASE is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.85 in FIRST SHIP LEASE on November 1, 2024 and sell it today you would earn a total of 0.48 from holding FIRST SHIP LEASE or generate 25.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. FIRST SHIP LEASE
Performance |
| Timeline |
| Electronic Arts |
| FIRST SHIP LEASE |
Electronic Arts and FIRST SHIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and FIRST SHIP
The main advantage of trading using opposite Electronic Arts and FIRST SHIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, FIRST SHIP 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 FIRST SHIP will offset losses from the drop in FIRST SHIP's long position.| Electronic Arts vs. China Eastern Airlines | Electronic Arts vs. STMicroelectronics NV | Electronic Arts vs. STORE ELECTRONIC | Electronic Arts vs. JAPAN AIRLINES |
| FIRST SHIP vs. HUTCHISON TELECOMM | FIRST SHIP vs. Chesapeake Utilities | FIRST SHIP vs. Iridium Communications | FIRST SHIP vs. Spirent Communications plc |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world |