Correlation Between AOI Electronics and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both AOI Electronics 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 AOI Electronics and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOI Electronics Co and Electronic Arts, you can compare the effects of market volatilities on AOI Electronics 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 AOI Electronics with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and Electronic Arts.
Diversification Opportunities for AOI Electronics and Electronic Arts
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AOI and Electronic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and AOI Electronics 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 AOI Electronics 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 AOI Electronics i.e., AOI Electronics and Electronic Arts go up and down completely randomly.
Pair Corralation between AOI Electronics and Electronic Arts
If you would invest 13,326 in Electronic Arts on August 28, 2024 and sell it today you would earn a total of 2,504 from holding Electronic Arts or generate 18.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOI Electronics Co vs. Electronic Arts
Performance |
| Timeline |
| AOI Electronics |
| Electronic Arts |
AOI Electronics and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOI Electronics and Electronic Arts
The main advantage of trading using opposite AOI Electronics and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics 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.| AOI Electronics vs. Universal Display | AOI Electronics vs. Entravision Communications | AOI Electronics vs. Spirent Communications plc | AOI Electronics vs. Internet Thailand PCL |
| Electronic Arts vs. Grand Canyon Education | Electronic Arts vs. Microchip Technology Incorporated | Electronic Arts vs. Check Point Software | Electronic Arts vs. EMBARK EDUCATION LTD |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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