Correlation Between VIVA WINE and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both VIVA WINE 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 VIVA WINE and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and Electronic Arts, you can compare the effects of market volatilities on VIVA WINE 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 VIVA WINE with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Electronic Arts.
Diversification Opportunities for VIVA WINE and Electronic Arts
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VIVA and Electronic is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and VIVA WINE 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 VIVA WINE GROUP 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 VIVA WINE i.e., VIVA WINE and Electronic Arts go up and down completely randomly.
Pair Corralation between VIVA WINE and Electronic Arts
Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 0.39 times more return on investment than Electronic Arts. However, VIVA WINE GROUP is 2.55 times less risky than Electronic Arts. It trades about 0.11 of its potential returns per unit of risk. Electronic Arts is currently generating about -0.17 per unit of risk. If you would invest 325.00 in VIVA WINE GROUP on November 3, 2024 and sell it today you would earn a total of 12.00 from holding VIVA WINE GROUP or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
VIVA WINE GROUP vs. Electronic Arts
Performance |
| Timeline |
| VIVA WINE GROUP |
| Electronic Arts |
VIVA WINE and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and Electronic Arts
The main advantage of trading using opposite VIVA WINE and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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.| VIVA WINE vs. Salesforce | VIVA WINE vs. Samsung Electronics Co | VIVA WINE vs. BORR DRILLING NEW | VIVA WINE vs. National Retail Properties |
| Electronic Arts vs. PREMIER FOODS | Electronic Arts vs. Align Technology | Electronic Arts vs. Firan Technology Group | Electronic Arts vs. Casio Computer CoLtd |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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