Correlation Between Dow Jones and EA Series
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and EA Series Trust, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and EA Series.
Diversification Opportunities for Dow Jones and EA Series
Modest diversification
The 3 months correlation between Dow and DTAN is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and EA Series go up and down completely randomly.
Pair Corralation between Dow Jones and EA Series
Assuming the 90 days trading horizon Dow Jones is expected to generate 118.34 times less return on investment than EA Series. But when comparing it to its historical volatility, Dow Jones Industrial is 173.68 times less risky than EA Series. It trades about 0.19 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.00 in EA Series Trust on August 31, 2024 and sell it today you would earn a total of 2,471 from holding EA Series Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. EA Series Trust
Performance |
| Timeline |
Dow Jones and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
EA Series Trust
Pair trading matchups for EA Series
Pair Trading with Dow Jones and EA Series
The main advantage of trading using opposite Dow Jones and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| EA Series vs. FT Vest Equity | EA Series vs. Zillow Group Class | EA Series vs. Northern Lights | EA Series vs. VanEck Vectors Moodys |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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