Correlation Between Dimensional ETF and EA Series
Can any of the company-specific risk be diversified away by investing in both Dimensional ETF 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 Dimensional ETF and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional ETF Trust and EA Series Trust, you can compare the effects of market volatilities on Dimensional ETF 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 Dimensional ETF with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional ETF and EA Series.
Diversification Opportunities for Dimensional ETF and EA Series
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dimensional and MDLV is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional ETF Trust 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 Dimensional ETF 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 Dimensional ETF Trust 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 Dimensional ETF i.e., Dimensional ETF and EA Series go up and down completely randomly.
Pair Corralation between Dimensional ETF and EA Series
Given the investment horizon of 90 days Dimensional ETF is expected to generate 1.88 times less return on investment than EA Series. But when comparing it to its historical volatility, Dimensional ETF Trust is 1.07 times less risky than EA Series. It trades about 0.11 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,579 in EA Series Trust on October 23, 2024 and sell it today you would earn a total of 58.00 from holding EA Series Trust or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional ETF Trust vs. EA Series Trust
Performance |
| Timeline |
| Dimensional ETF Trust |
| EA Series Trust |
Dimensional ETF and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional ETF and EA Series
The main advantage of trading using opposite Dimensional ETF and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional ETF 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.| Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional International Value | Dimensional ETF vs. Dimensional Targeted Value |
| EA Series vs. FT Vest Equity | EA Series vs. Northern Lights | EA Series vs. Dimensional International High | EA Series vs. JPMorgan Fundamental Data |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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