Correlation Between Electronic Arts and TMBThanachart Bank

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

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

Diversification Opportunities for Electronic Arts and TMBThanachart Bank

0.0

Correlation Coefficient

Electronic Arts  TMBThanachart Bank

Pay attention - limited upside

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

Pair Corralation between Electronic Arts and TMBThanachart Bank

If you would invest  0.00  in TMBThanachart Bank PCL on December 28, 2024 and sell it today you would earn a total of  0.00  from holding TMBThanachart Bank PCL or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Electronic Arts  vs.  TMBThanachart Bank PCL

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. In spite of comparatively stable basic indicators, Electronic Arts is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

TMBThanachart Bank PCL

Risk-Adjusted Performance

Weak

Over the last 90 days TMBThanachart Bank PCL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, TMBThanachart Bank is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Electronic Arts and TMBThanachart Bank

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

The idea behind Electronic Arts and TMBThanachart Bank PCL 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.