Correlation Between Evolution Mining and ELECTRONIC ARTS
Can any of the company-specific risk be diversified away by investing in both Evolution Mining 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 Evolution Mining and ELECTRONIC ARTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining Limited and ELECTRONIC ARTS, you can compare the effects of market volatilities on Evolution Mining 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 Evolution Mining with a short position of ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and ELECTRONIC ARTS.
Diversification Opportunities for Evolution Mining and ELECTRONIC ARTS
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Evolution and ELECTRONIC is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS and Evolution Mining 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 Evolution Mining Limited 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 Evolution Mining i.e., Evolution Mining and ELECTRONIC ARTS go up and down completely randomly.
Pair Corralation between Evolution Mining and ELECTRONIC ARTS
Assuming the 90 days horizon Evolution Mining Limited is expected to under-perform the ELECTRONIC ARTS. In addition to that, Evolution Mining is 1.41 times more volatile than ELECTRONIC ARTS. It trades about -0.11 of its total potential returns per unit of risk. ELECTRONIC ARTS is currently generating about 0.62 per unit of volatility. If you would invest 13,368 in ELECTRONIC ARTS on August 26, 2024 and sell it today you would earn a total of 2,640 from holding ELECTRONIC ARTS or generate 19.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining Limited vs. ELECTRONIC ARTS
Performance |
| Timeline |
| Evolution Mining |
| ELECTRONIC ARTS |
Evolution Mining and ELECTRONIC ARTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and ELECTRONIC ARTS
The main advantage of trading using opposite Evolution Mining and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining 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.| Evolution Mining vs. Franco Nevada | Evolution Mining vs. Agnico Eagle Mines | Evolution Mining vs. Superior Plus Corp | Evolution Mining vs. NMI Holdings |
| ELECTRONIC ARTS vs. QBE Insurance Group | ELECTRONIC ARTS vs. NXP Semiconductors NV | ELECTRONIC ARTS vs. JSC Halyk bank | ELECTRONIC ARTS vs. Chiba Bank |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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