Correlation Between Lendinvest PLC and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC 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 Lendinvest PLC and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Electronic Arts, you can compare the effects of market volatilities on Lendinvest PLC 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 Lendinvest PLC with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Electronic Arts.
Diversification Opportunities for Lendinvest PLC and Electronic Arts
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendinvest and Electronic is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC i.e., Lendinvest PLC and Electronic Arts go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Electronic Arts
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 5.54 times less return on investment than Electronic Arts. In addition to that, Lendinvest PLC is 1.2 times more volatile than Electronic Arts. It trades about 0.08 of its total potential returns per unit of risk. Electronic Arts is currently generating about 0.55 per unit of volatility. If you would invest 14,550 in Electronic Arts on August 30, 2024 and sell it today you would earn a total of 1,801 from holding Electronic Arts or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lendinvest PLC vs. Electronic Arts
Performance |
| Timeline |
| Lendinvest PLC |
| Electronic Arts |
Lendinvest PLC and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Electronic Arts
The main advantage of trading using opposite Lendinvest PLC and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC 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.| Lendinvest PLC vs. Tyson Foods Cl | Lendinvest PLC vs. Metals Exploration Plc | Lendinvest PLC vs. GreenX Metals | Lendinvest PLC vs. Austevoll Seafood ASA |
| Electronic Arts vs. GreenX Metals | Electronic Arts vs. Molson Coors Beverage | Electronic Arts vs. Greenroc Mining PLC | Electronic Arts vs. Skandinaviska Enskilda Banken |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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