Correlation Between Zegona Communications and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Zegona Communications 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 Zegona Communications and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zegona Communications Plc and Electronic Arts, you can compare the effects of market volatilities on Zegona Communications 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 Zegona Communications with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Electronic Arts.
Diversification Opportunities for Zegona Communications and Electronic Arts
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zegona and Electronic is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Zegona Communications 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 Zegona Communications Plc 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 Zegona Communications i.e., Zegona Communications and Electronic Arts go up and down completely randomly.
Pair Corralation between Zegona Communications and Electronic Arts
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 0.69 times more return on investment than Electronic Arts. However, Zegona Communications Plc is 1.45 times less risky than Electronic Arts. It trades about 0.2 of its potential returns per unit of risk. Electronic Arts is currently generating about -0.12 per unit of risk. If you would invest 42,200 in Zegona Communications Plc on November 7, 2024 and sell it today you would earn a total of 4,800 from holding Zegona Communications Plc or generate 11.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Zegona Communications Plc vs. Electronic Arts
Performance |
| Timeline |
| Zegona Communications Plc |
| Electronic Arts |
Zegona Communications and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Electronic Arts
The main advantage of trading using opposite Zegona Communications and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications 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.| Zegona Communications vs. Cellnex Telecom SA | Zegona Communications vs. Universal Display Corp | Zegona Communications vs. Litigation Capital Management | Zegona Communications vs. Qurate Retail Series |
| Electronic Arts vs. Samsung Electronics Co | Electronic Arts vs. Samsung Electronics Co | Electronic Arts vs. Toyota Motor Corp | Electronic Arts vs. Reliance Industries 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |