Correlation Between Capital Group and EA Series
Can any of the company-specific risk be diversified away by investing in both Capital Group 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 Capital Group and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Group Core and EA Series Trust, you can compare the effects of market volatilities on Capital Group 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 Capital Group with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Group and EA Series.
Diversification Opportunities for Capital Group and EA Series
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and DRAI is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Capital Group Core 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 Capital Group 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 Capital Group Core 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 Capital Group i.e., Capital Group and EA Series go up and down completely randomly.
Pair Corralation between Capital Group and EA Series
Given the investment horizon of 90 days Capital Group Core is expected to generate 0.56 times more return on investment than EA Series. However, Capital Group Core is 1.79 times less risky than EA Series. It trades about 0.15 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.05 per unit of risk. If you would invest 3,094 in Capital Group Core on September 3, 2024 and sell it today you would earn a total of 102.00 from holding Capital Group Core or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Group Core vs. EA Series Trust
Performance |
| Timeline |
| Capital Group Core |
| EA Series Trust |
Capital Group and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Group and EA Series
The main advantage of trading using opposite Capital Group and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Group 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.| Capital Group vs. First Trust Multi Asset | Capital Group vs. Collaborative Investment Series | Capital Group vs. EA Series Trust | Capital Group vs. Ocean Park International |
| EA Series vs. First Trust Multi Asset | EA Series vs. Collaborative Investment Series | EA Series vs. Ocean Park International | EA Series vs. Akros Monthly Payout |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stocks Directory Find actively traded stocks across global markets |