Correlation Between Oakley Capital and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Oakley Capital 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 Oakley Capital and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Electronic Arts, you can compare the effects of market volatilities on Oakley Capital 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 Oakley Capital with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Electronic Arts.
Diversification Opportunities for Oakley Capital and Electronic Arts
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oakley and Electronic is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Oakley Capital 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 Oakley Capital Investments 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 Oakley Capital i.e., Oakley Capital and Electronic Arts go up and down completely randomly.
Pair Corralation between Oakley Capital and Electronic Arts
Assuming the 90 days trading horizon Oakley Capital Investments is expected to under-perform the Electronic Arts. But the stock apears to be less risky and, when comparing its historical volatility, Oakley Capital Investments is 1.8 times less risky than Electronic Arts. The stock trades about -0.31 of its potential returns per unit of risk. The Electronic Arts is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 15,259 in Electronic Arts on September 4, 2024 and sell it today you would earn a total of 1,456 from holding Electronic Arts or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oakley Capital Investments vs. Electronic Arts
Performance |
| Timeline |
| Oakley Capital Inves |
| Electronic Arts |
Oakley Capital and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Electronic Arts
The main advantage of trading using opposite Oakley Capital and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital 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.| Oakley Capital vs. SupplyMe Capital PLC | Oakley Capital vs. Lloyds Banking Group | Oakley Capital vs. Premier African Minerals | Oakley Capital vs. SANTANDER UK 8 |
| Electronic Arts vs. Centaur Media | Electronic Arts vs. Oakley Capital Investments | Electronic Arts vs. Live Nation Entertainment | Electronic Arts vs. New Residential Investment |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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