Correlation Between Electronic Arts and Trisura

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

By analyzing existing cross correlation between Electronic Arts and Trisura Group, you can compare the effects of market volatilities on Electronic Arts and Trisura 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 Trisura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Trisura.

Diversification Opportunities for Electronic Arts and Trisura

0.21

Correlation Coefficient

Electronic Arts  Trisura

Modest diversification

The 3 months correlation between Electronic and Trisura is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Trisura Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisura Group 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 Trisura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisura Group has no effect on the direction of Electronic Arts i.e., Electronic Arts and Trisura go up and down completely randomly.

Pair Corralation between Electronic Arts and Trisura

Assuming the 90 days trading horizon Electronic Arts is expected to under-perform the Trisura. In addition to that, Electronic Arts is 2.2 times more volatile than Trisura Group. It trades about -0.27 of its total potential returns per unit of risk. Trisura Group is currently generating about -0.26 per unit of volatility. If you would invest  2,540  in Trisura Group on October 26, 2024 and sell it today you would lose (240.00) from holding Trisura Group or give up 9.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Electronic Arts  vs.  Trisura Group

Electronic Arts

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Electronic Arts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Trisura Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trisura Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Electronic Arts and Trisura

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

The idea behind Electronic Arts and Trisura Group 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.