Correlation Between SLR Investment and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both SLR Investment 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 SLR Investment and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLR Investment Corp and Electronic Arts, you can compare the effects of market volatilities on SLR Investment 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 SLR Investment with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Electronic Arts.
Diversification Opportunities for SLR Investment and Electronic Arts
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SLR and Electronic is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and SLR Investment 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 SLR Investment Corp 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 SLR Investment i.e., SLR Investment and Electronic Arts go up and down completely randomly.
Pair Corralation between SLR Investment and Electronic Arts
Assuming the 90 days horizon SLR Investment is expected to generate 2.47 times less return on investment than Electronic Arts. In addition to that, SLR Investment is 1.03 times more volatile than Electronic Arts. It trades about 0.06 of its total potential returns per unit of risk. Electronic Arts is currently generating about 0.16 per unit of volatility. If you would invest 12,266 in Electronic Arts on August 31, 2024 and sell it today you would earn a total of 3,248 from holding Electronic Arts or generate 26.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Electronic Arts
Performance |
| Timeline |
| SLR Investment Corp |
| Electronic Arts |
SLR Investment and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Electronic Arts
The main advantage of trading using opposite SLR Investment and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment 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.| SLR Investment vs. Astral Foods Limited | SLR Investment vs. Collins Foods Limited | SLR Investment vs. United Natural Foods | SLR Investment vs. GRIFFIN MINING LTD |
| Electronic Arts vs. URBAN OUTFITTERS | Electronic Arts vs. Astral Foods Limited | Electronic Arts vs. JJ SNACK FOODS | Electronic Arts vs. CarsalesCom |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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