Correlation Between Insignia Systems and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Insignia Systems 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 Insignia Systems and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Systems and Electronic Arts, you can compare the effects of market volatilities on Insignia Systems 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 Insignia Systems with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Systems and Electronic Arts.
Diversification Opportunities for Insignia Systems and Electronic Arts
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Insignia and Electronic is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Systems and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Insignia Systems 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 Insignia Systems 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 Insignia Systems i.e., Insignia Systems and Electronic Arts go up and down completely randomly.
Pair Corralation between Insignia Systems and Electronic Arts
If you would invest 535.00 in Insignia Systems on January 26, 2024 and sell it today you would earn a total of 0.00 from holding Insignia Systems or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Insignia Systems vs. Electronic Arts
Performance |
| Timeline |
| Insignia Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Electronic Arts |
Insignia Systems and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Systems and Electronic Arts
The main advantage of trading using opposite Insignia Systems and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia Systems 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' long position.| Insignia Systems vs. Steel Connect | Insignia Systems vs. Baosheng Media Group | Insignia Systems vs. Impact Fusion International | Insignia Systems vs. Clubhouse Media Group |
| Electronic Arts vs. i3 Interactive | Electronic Arts vs. GameSquare Holdings | Electronic Arts vs. IGG Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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