Correlation Between Q2M Managementberatu and ELECTRONIC ARTS

Can any of the company-specific risk be diversified away by investing in both Q2M Managementberatu 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 Q2M Managementberatu and ELECTRONIC ARTS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Q2M Managementberatung AG and ELECTRONIC ARTS, you can compare the effects of market volatilities on Q2M Managementberatu 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 Q2M Managementberatu with a short position of ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2M Managementberatu and ELECTRONIC ARTS.

Diversification Opportunities for Q2M Managementberatu and ELECTRONIC ARTS

0.41

Correlation Coefficient

Q2M Managementberatu  ELECTRONIC ARTS

Very weak diversification

The 3 months correlation between Q2M and ELECTRONIC is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Q2M Managementberatung AG and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS and Q2M Managementberatu 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 Q2M Managementberatung AG 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 Q2M Managementberatu i.e., Q2M Managementberatu and ELECTRONIC ARTS go up and down completely randomly.

Pair Corralation between Q2M Managementberatu and ELECTRONIC ARTS

Assuming the 90 days trading horizon Q2M Managementberatung AG is expected to under-perform the ELECTRONIC ARTS. But the stock apears to be less risky and, when comparing its historical volatility, Q2M Managementberatung AG is 4.35 times less risky than ELECTRONIC ARTS. The stock trades about -0.13 of its potential returns per unit of risk. The ELECTRONIC ARTS is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  14,107  in ELECTRONIC ARTS on December 30, 2024 and sell it today you would lose (659.00) from holding ELECTRONIC ARTS or give up 4.67% of portfolio value over 90 days.

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

Q2M Managementberatung AG  vs.  ELECTRONIC ARTS

Q2M Managementberatung

Risk-Adjusted Performance

Very Weak

Over the last 90 days Q2M Managementberatung AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Q2M Managementberatu is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 Q2M Managementberatu and ELECTRONIC ARTS

The main advantage of trading using opposite Q2M Managementberatu and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2M Managementberatu 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 Q2M Managementberatung AG 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.