Correlation Between Nanjing Panda and ELECTRONIC ARTS

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

By analyzing existing cross correlation between Nanjing Panda Electronics and ELECTRONIC ARTS, you can compare the effects of market volatilities on Nanjing Panda 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 Nanjing Panda with a short position of ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Panda and ELECTRONIC ARTS.

Diversification Opportunities for Nanjing Panda and ELECTRONIC ARTS

0.0

Correlation Coefficient

Nanjing Panda  ELECTRONIC ARTS

Pay attention - limited upside

The 3 months correlation between Nanjing and ELECTRONIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Panda Electronics and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS and Nanjing Panda 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 Nanjing Panda Electronics 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 Nanjing Panda i.e., Nanjing Panda and ELECTRONIC ARTS go up and down completely randomly.

Pair Corralation between Nanjing Panda and ELECTRONIC ARTS

If you would invest  33.00  in Nanjing Panda Electronics on December 22, 2024 and sell it today you would earn a total of  0.00  from holding Nanjing Panda Electronics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Nanjing Panda Electronics  vs.  ELECTRONIC ARTS

Nanjing Panda Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nanjing Panda Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nanjing Panda is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 rather sound basic indicators, ELECTRONIC ARTS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nanjing Panda and ELECTRONIC ARTS

The main advantage of trading using opposite Nanjing Panda and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Panda 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's long position.

The idea behind Nanjing Panda Electronics and ELECTRONIC ARTS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.