Correlation Between ETRACS Monthly and EA Series
Can any of the company-specific risk be diversified away by investing in both ETRACS Monthly and EA Series 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 ETRACS Monthly and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETRACS Monthly Pay and EA Series Trust, you can compare the effects of market volatilities on ETRACS Monthly and EA Series 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 ETRACS Monthly with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETRACS Monthly and EA Series.
Diversification Opportunities for ETRACS Monthly and EA Series
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETRACS and BUXX is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ETRACS Monthly Pay and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust and ETRACS Monthly 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 ETRACS Monthly Pay are associated (or correlated) with EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of ETRACS Monthly i.e., ETRACS Monthly and EA Series go up and down completely randomly.
Pair Corralation between ETRACS Monthly and EA Series
Given the investment horizon of 90 days ETRACS Monthly Pay is expected to generate 11.52 times more return on investment than EA Series. However, ETRACS Monthly is 11.52 times more volatile than EA Series Trust. It trades about 0.1 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.32 per unit of risk. If you would invest 1,753 in ETRACS Monthly Pay on September 1, 2024 and sell it today you would earn a total of 307.00 from holding ETRACS Monthly Pay or generate 17.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
ETRACS Monthly Pay vs. EA Series Trust
Performance |
| Timeline |
| ETRACS Monthly Pay |
| EA Series Trust |
ETRACS Monthly and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETRACS Monthly and EA Series
The main advantage of trading using opposite ETRACS Monthly and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETRACS Monthly position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| ETRACS Monthly vs. ProShares VIX Mid Term | ETRACS Monthly vs. iPath Series B | ETRACS Monthly vs. ProShares Short Russell2000 |
| EA Series vs. Valued Advisers Trust | EA Series vs. Columbia Diversified Fixed | EA Series vs. Principal Exchange Traded Funds | EA Series vs. Doubleline Etf Trust |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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