Correlation Between EA Series and Core Alternative
Can any of the company-specific risk be diversified away by investing in both EA Series and Core Alternative 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 EA Series and Core Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EA Series Trust and Core Alternative ETF, you can compare the effects of market volatilities on EA Series and Core Alternative 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 EA Series with a short position of Core Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Core Alternative.
Diversification Opportunities for EA Series and Core Alternative
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAOS and Core is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Core Alternative ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Alternative ETF and EA Series 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 EA Series Trust are associated (or correlated) with Core Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Alternative ETF has no effect on the direction of EA Series i.e., EA Series and Core Alternative go up and down completely randomly.
Pair Corralation between EA Series and Core Alternative
Given the investment horizon of 90 days EA Series is expected to generate 1.55 times less return on investment than Core Alternative. But when comparing it to its historical volatility, EA Series Trust is 8.91 times less risky than Core Alternative. It trades about 0.03 of its potential returns per unit of risk. Core Alternative ETF is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,611 in Core Alternative ETF on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Core Alternative ETF or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. Core Alternative ETF
Performance |
| Timeline |
| EA Series Trust |
| Core Alternative ETF |
EA Series and Core Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Core Alternative
The main advantage of trading using opposite EA Series and Core Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Core Alternative 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 Core Alternative will offset losses from the drop in Core Alternative's long position.The idea behind EA Series Trust and Core Alternative ETF 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.| Core Alternative vs. AGFiQ Market Neutral | Core Alternative vs. Cambria Global Momentum | Core Alternative vs. Cambria Global Asset | Core Alternative vs. Cambria Emerging Shareholder |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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