Correlation Between Glu Mobile and Electronic Arts

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

By analyzing existing cross correlation between Glu Mobile and Electronic Arts, you can compare the effects of market volatilities on Glu Mobile 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 Glu Mobile with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glu Mobile and Electronic Arts.

Diversification Opportunities for Glu Mobile and Electronic Arts

0.0

Correlation Coefficient

Glu Mobile  Electronic Arts

Pay attention - limited upside

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

Pair Corralation between Glu Mobile and Electronic Arts

If you would invest (100.00) in Glu Mobile on January 20, 2024 and sell it today you would earn a total of  100.00  from holding Glu Mobile or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Glu Mobile  vs.  Electronic Arts

Glu Mobile

Risk-Adjusted Performance

0 of 100

Very Weak

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

Electronic Arts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Electronic Arts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Glu Mobile and Electronic Arts

The main advantage of trading using opposite Glu Mobile and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glu Mobile 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.

The idea behind Glu Mobile 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.

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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .