Correlation Between Gravity and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Gravity 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 Gravity and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gravity Co and Electronic Arts, you can compare the effects of market volatilities on Gravity 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 Gravity with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gravity and Electronic Arts.
Diversification Opportunities for Gravity and Electronic Arts
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gravity and Electronic is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gravity Co and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Gravity 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 Gravity Co 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 Gravity i.e., Gravity and Electronic Arts go up and down completely randomly.
Pair Corralation between Gravity and Electronic Arts
Given the investment horizon of 90 days Gravity Co is expected to generate 2.23 times more return on investment than Electronic Arts. However, Gravity is 2.23 times more volatile than Electronic Arts. It trades about 0.05 of its potential returns per unit of risk. Electronic Arts is currently generating about 0.05 per unit of risk. If you would invest 4,088 in Gravity Co on August 27, 2024 and sell it today you would earn a total of 2,576 from holding Gravity Co or generate 63.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gravity Co vs. Electronic Arts
Performance |
| Timeline |
| Gravity |
| Electronic Arts |
Gravity and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gravity and Electronic Arts
The main advantage of trading using opposite Gravity and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gravity 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.| Gravity vs. Doubledown Interactive Co | Gravity vs. Playtika Holding Corp | Gravity vs. NetEase | Gravity vs. SohuCom |
| Electronic Arts vs. Playstudios | Electronic Arts vs. Talkspace | Electronic Arts vs. Katapult Holdings Equity | Electronic Arts vs. Aquagold International |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| 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 | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |