Correlation Between Banco Pine and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Banco Pine 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 Banco Pine and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Pine SA and Electronic Arts, you can compare the effects of market volatilities on Banco Pine 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 Banco Pine with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Pine and Electronic Arts.
Diversification Opportunities for Banco Pine and Electronic Arts
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Electronic is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Banco Pine SA and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Banco Pine 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 Banco Pine SA 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 Banco Pine i.e., Banco Pine and Electronic Arts go up and down completely randomly.
Pair Corralation between Banco Pine and Electronic Arts
Assuming the 90 days trading horizon Banco Pine is expected to generate 6.32 times less return on investment than Electronic Arts. In addition to that, Banco Pine is 1.52 times more volatile than Electronic Arts. It trades about 0.02 of its total potential returns per unit of risk. Electronic Arts is currently generating about 0.2 per unit of volatility. If you would invest 46,793 in Electronic Arts on September 13, 2024 and sell it today you would earn a total of 2,207 from holding Electronic Arts or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Banco Pine SA vs. Electronic Arts
Performance |
| Timeline |
| Banco Pine SA |
| Electronic Arts |
Banco Pine and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Pine and Electronic Arts
The main advantage of trading using opposite Banco Pine and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Pine 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.| Banco Pine vs. Marvell Technology | Banco Pine vs. Cognizant Technology Solutions | Banco Pine vs. Bio Techne | Banco Pine vs. Apartment Investment and |
| Electronic Arts vs. Bank of America | Electronic Arts vs. Sumitomo Mitsui Financial | Electronic Arts vs. Metalrgica Riosulense SA | Electronic Arts vs. Ameriprise Financial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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