Correlation Between Electronic Arts and Hasbro
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Hasbro 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 Hasbro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Hasbro Inc, you can compare the effects of market volatilities on Electronic Arts and Hasbro 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 Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Hasbro.
Diversification Opportunities for Electronic Arts and Hasbro
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electronic and Hasbro is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc 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 Hasbro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hasbro Inc has no effect on the direction of Electronic Arts i.e., Electronic Arts and Hasbro go up and down completely randomly.
Pair Corralation between Electronic Arts and Hasbro
Allowing for the 90-day total investment horizon Electronic Arts is expected to generate 4.91 times less return on investment than Hasbro. But when comparing it to its historical volatility, Electronic Arts is 1.92 times less risky than Hasbro. It trades about 0.01 of its potential returns per unit of risk. Hasbro Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,877 in Hasbro Inc on January 21, 2024 and sell it today you would earn a total of 650.00 from holding Hasbro Inc or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Hasbro Inc
Performance |
| Timeline |
| Electronic Arts |
| Hasbro Inc |
Electronic Arts and Hasbro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Hasbro
The main advantage of trading using opposite Electronic Arts and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Hasbro 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 Hasbro will offset losses from the drop in Hasbro's long position.| Electronic Arts vs. Nintendo Co ADR | Electronic Arts vs. Playtika Holding Corp | Electronic Arts vs. Doubledown InteractiveCo |
| Hasbro vs. Thor Industries | Hasbro vs. EZGO Technologies | Hasbro vs. LCI Industries | Hasbro vs. Winnebago Industries |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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