Correlation Between Tradegate and ELECTRONIC ARTS
Can any of the company-specific risk be diversified away by investing in both Tradegate 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 Tradegate and ELECTRONIC ARTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and ELECTRONIC ARTS, you can compare the effects of market volatilities on Tradegate 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 Tradegate with a short position of ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and ELECTRONIC ARTS.
Diversification Opportunities for Tradegate and ELECTRONIC ARTS
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tradegate and ELECTRONIC is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS and Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and ELECTRONIC ARTS go up and down completely randomly.
Pair Corralation between Tradegate and ELECTRONIC ARTS
Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to under-perform the ELECTRONIC ARTS. But the stock apears to be less risky and, when comparing its historical volatility, Tradegate AG Wertpapierhandelsbank is 1.21 times less risky than ELECTRONIC ARTS. The stock trades about -0.03 of its potential returns per unit of risk. The ELECTRONIC ARTS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11,122 in ELECTRONIC ARTS on September 19, 2024 and sell it today you would earn a total of 3,708 from holding ELECTRONIC ARTS or generate 33.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. ELECTRONIC ARTS
Performance |
| Timeline |
| Tradegate AG Wertpap |
| ELECTRONIC ARTS |
Tradegate and ELECTRONIC ARTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and ELECTRONIC ARTS
The main advantage of trading using opposite Tradegate and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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's long position.| Tradegate vs. Superior Plus Corp | Tradegate vs. SIVERS SEMICONDUCTORS AB | Tradegate vs. CHINA HUARONG ENERHD 50 | Tradegate vs. NORDIC HALIBUT AS |
| ELECTRONIC ARTS vs. Tradegate AG Wertpapierhandelsbank | ELECTRONIC ARTS vs. Constellation Software | ELECTRONIC ARTS vs. ASURE SOFTWARE | ELECTRONIC ARTS vs. FORMPIPE SOFTWARE AB |
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 CEOs Directory module to screen CEOs from public companies around the world.
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