Correlation Between GDEV INC and Electronic Arts

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

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

Diversification Opportunities for GDEV INC and Electronic Arts

0.84

Correlation Coefficient

GDEV INC  Electronic Arts

Very poor diversification

The 3 months correlation between GDEV and Electronic is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding GDEV INC and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and GDEV INC 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 GDEV INC 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 GDEV INC i.e., GDEV INC and Electronic Arts go up and down completely randomly.

Pair Corralation between GDEV INC and Electronic Arts

If you would invest  0.00  in GDEV INC on February 23, 2024 and sell it today you would earn a total of  0.00  from holding GDEV INC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.56%
Values	Daily Returns

GDEV INC  vs.  Electronic Arts

GDEV INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GDEV INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, GDEV INC is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated 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 somewhat strong basic indicators, Electronic Arts is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GDEV INC and Electronic Arts

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

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.