Correlation Between Kanzhun and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Kanzhun 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 Kanzhun and Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kanzhun Ltd ADR and Electronic Arts, you can compare the effects of market volatilities on Kanzhun 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 Kanzhun with a short position of Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kanzhun and Electronic Arts.
Diversification Opportunities for Kanzhun and Electronic Arts
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kanzhun and Electronic is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kanzhun Ltd ADR and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Kanzhun 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 Kanzhun Ltd ADR 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 Kanzhun i.e., Kanzhun and Electronic Arts go up and down completely randomly.
Pair Corralation between Kanzhun and Electronic Arts
Allowing for the 90-day total investment horizon Kanzhun Ltd ADR is expected to generate 2.23 times more return on investment than Electronic Arts. However, Kanzhun is 2.23 times more volatile than Electronic Arts. It trades about 0.2 of its potential returns per unit of risk. Electronic Arts is currently generating about -0.22 per unit of risk. If you would invest 1,842 in Kanzhun Ltd ADR on January 30, 2024 and sell it today you would earn a total of 136.00 from holding Kanzhun Ltd ADR or generate 7.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kanzhun Ltd ADR vs. Electronic Arts
Performance |
Timeline |
Kanzhun Ltd ADR |
Electronic Arts |
Kanzhun and Electronic Arts Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kanzhun and Electronic Arts
The main advantage of trading using opposite Kanzhun and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kanzhun 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.Kanzhun vs. Automatic Data Processing | Kanzhun vs. Robert Half International | Kanzhun vs. TrueBlue | Kanzhun vs. TriNet Group |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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