Correlation Between Fundo De and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Fundo De 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 Fundo De and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundo de Investimento and Electronic Arts, you can compare the effects of market volatilities on Fundo De 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 Fundo De with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundo De and Electronic Arts.
Diversification Opportunities for Fundo De and Electronic Arts
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fundo and Electronic is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fundo de Investimento and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Fundo De 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 Fundo de Investimento 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 Fundo De i.e., Fundo De and Electronic Arts go up and down completely randomly.
Pair Corralation between Fundo De and Electronic Arts
Assuming the 90 days trading horizon Fundo de Investimento is expected to under-perform the Electronic Arts. But the fund apears to be less risky and, when comparing its historical volatility, Fundo de Investimento is 1.7 times less risky than Electronic Arts. The fund trades about -0.09 of its potential returns per unit of risk. The Electronic Arts is currently generating about 0.88 of returns per unit of risk over similar time horizon. If you would invest 41,010 in Electronic Arts on August 28, 2024 and sell it today you would earn a total of 7,497 from holding Electronic Arts or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundo de Investimento vs. Electronic Arts
Performance |
| Timeline |
| Fundo de Investimento |
| Electronic Arts |
Fundo De and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundo De and Electronic Arts
The main advantage of trading using opposite Fundo De and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundo De 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' long position.| Fundo De vs. BTG Pactual Logstica | Fundo De vs. Plano Plano Desenvolvimento | Fundo De vs. Companhia Habitasul de | Fundo De vs. The Procter Gamble |
| Electronic Arts vs. American Airlines Group | Electronic Arts vs. G2D Investments | Electronic Arts vs. Bread Financial Holdings | Electronic Arts vs. United Airlines Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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