Correlation Between Electronic Arts and Autohome
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Autohome 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 Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Autohome, you can compare the effects of market volatilities on Electronic Arts and Autohome 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 Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Autohome.
Diversification Opportunities for Electronic Arts and Autohome
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Electronic and Autohome is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome 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 Autohome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome has no effect on the direction of Electronic Arts i.e., Electronic Arts and Autohome go up and down completely randomly.
Pair Corralation between Electronic Arts and Autohome
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.57 times more return on investment than Autohome. However, Electronic Arts is 1.75 times less risky than Autohome. It trades about 0.3 of its potential returns per unit of risk. Autohome is currently generating about 0.09 per unit of risk. If you would invest 40,242 in Electronic Arts on September 9, 2024 and sell it today you would earn a total of 10,408 from holding Electronic Arts or generate 25.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Electronic Arts vs. Autohome
Performance |
Timeline |
Electronic Arts |
Autohome |
Electronic Arts and Autohome Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Electronic Arts and Autohome
The main advantage of trading using opposite Electronic Arts and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Autohome 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 Autohome will offset losses from the drop in Autohome's long position.Electronic Arts vs. Agilent Technologies | Electronic Arts vs. Align Technology | Electronic Arts vs. Bemobi Mobile Tech | Electronic Arts vs. Cognizant Technology Solutions |
Autohome vs. MAHLE Metal Leve | Autohome vs. American Airlines Group | Autohome vs. Iron Mountain Incorporated | Autohome vs. United Airlines Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Commodity Directory Find actively traded commodities issued by global exchanges | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |