Correlation Between Electronic Arts and Blue Hat
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Blue Hat 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 Blue Hat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Blue Hat Interactive, you can compare the effects of market volatilities on Electronic Arts and Blue Hat 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 Blue Hat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Blue Hat.
Diversification Opportunities for Electronic Arts and Blue Hat
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Electronic and Blue is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Blue Hat Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Hat Interactive 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 Blue Hat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Hat Interactive has no effect on the direction of Electronic Arts i.e., Electronic Arts and Blue Hat go up and down completely randomly.
Pair Corralation between Electronic Arts and Blue Hat
Allowing for the 90-day total investment horizon Electronic Arts is expected to under-perform the Blue Hat. But the stock apears to be less risky and, when comparing its historical volatility, Electronic Arts is 6.11 times less risky than Blue Hat. The stock trades about -0.1 of its potential returns per unit of risk. The Blue Hat Interactive is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 115.00 in Blue Hat Interactive on January 25, 2024 and sell it today you would lose (4.00) from holding Blue Hat Interactive or give up 3.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Electronic Arts vs. Blue Hat Interactive
Performance |
Timeline |
Electronic Arts |
Blue Hat Interactive |
Electronic Arts and Blue Hat Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Electronic Arts and Blue Hat
The main advantage of trading using opposite Electronic Arts and Blue Hat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Blue Hat 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 Blue Hat will offset losses from the drop in Blue Hat's long position.Electronic Arts vs. i3 Interactive | Electronic Arts vs. GameSquare Holdings | Electronic Arts vs. IGG Inc |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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