Correlation Between PPLA Participations and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both PPLA Participations 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 PPLA Participations and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPLA Participations and Electronic Arts, you can compare the effects of market volatilities on PPLA Participations 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 PPLA Participations with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPLA Participations and Electronic Arts.
Diversification Opportunities for PPLA Participations and Electronic Arts
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PPLA and Electronic is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding PPLA Participations and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and PPLA Participations 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 PPLA Participations 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 PPLA Participations i.e., PPLA Participations and Electronic Arts go up and down completely randomly.
Pair Corralation between PPLA Participations and Electronic Arts
Assuming the 90 days trading horizon PPLA Participations is expected to under-perform the Electronic Arts. In addition to that, PPLA Participations is 6.97 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 0.81 per unit of volatility. If you would invest 41,205 in Electronic Arts on August 24, 2024 and sell it today you would earn a total of 7,639 from holding Electronic Arts or generate 18.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPLA Participations vs. Electronic Arts
Performance |
| Timeline |
| PPLA Participations |
| Electronic Arts |
PPLA Participations and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPLA Participations and Electronic Arts
The main advantage of trading using opposite PPLA Participations and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPLA Participations 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.| PPLA Participations vs. RB Capital Office | PPLA Participations vs. Ishares Msci Brazil | PPLA Participations vs. Investo Etf Global | PPLA Participations vs. iShares BMFBovespa Small |
| Electronic Arts vs. Take Two Interactive Software | Electronic Arts vs. Fras le SA | Electronic Arts vs. Clave Indices De | Electronic Arts vs. BTG Pactual Logstica |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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