Correlation Between Electronic Arts and TravelCenters

Can any of the company-specific risk be diversified away by investing in both Electronic Arts and TravelCenters 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 Electronic Arts and TravelCenters into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Electronic Arts and TravelCenters Of America, you can compare the effects of market volatilities on Electronic Arts and TravelCenters 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 Electronic Arts with a short position of TravelCenters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and TravelCenters.

Diversification Opportunities for Electronic Arts and TravelCenters

0.0

Correlation Coefficient

Electronic Arts  TravelCenters

Pay attention - limited upside

The 3 months correlation between Electronic and TravelCenters is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and TravelCenters Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TravelCenters Of America and Electronic Arts 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 Electronic Arts are associated (or correlated) with TravelCenters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TravelCenters Of America has no effect on the direction of Electronic Arts i.e., Electronic Arts and TravelCenters go up and down completely randomly.

Pair Corralation between Electronic Arts and TravelCenters

If you would invest  12,273  in Electronic Arts on December 5, 2024 and sell it today you would earn a total of  909.00  from holding Electronic Arts or generate 7.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Electronic Arts  vs.  TravelCenters Of America

Electronic Arts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electronic Arts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

TravelCenters Of America

Risk-Adjusted Performance

Very Weak

Over the last 90 days TravelCenters Of America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, TravelCenters is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Electronic Arts and TravelCenters

The main advantage of trading using opposite Electronic Arts and TravelCenters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, TravelCenters 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 TravelCenters will offset losses from the drop in TravelCenters' long position.

The idea behind Electronic Arts and TravelCenters Of America pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.