Correlation Between EA Series and AltShares Trust
Can any of the company-specific risk be diversified away by investing in both EA Series and AltShares Trust 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 AltShares Trust 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 AltShares Trust , you can compare the effects of market volatilities on EA Series and AltShares Trust 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 AltShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and AltShares Trust.
Diversification Opportunities for EA Series and AltShares Trust
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DRAI and AltShares is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and AltShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltShares Trust 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 AltShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltShares Trust has no effect on the direction of EA Series i.e., EA Series and AltShares Trust go up and down completely randomly.
Pair Corralation between EA Series and AltShares Trust
Given the investment horizon of 90 days EA Series Trust is expected to under-perform the AltShares Trust. In addition to that, EA Series is 2.85 times more volatile than AltShares Trust . It trades about -0.08 of its total potential returns per unit of risk. AltShares Trust is currently generating about -0.02 per unit of volatility. If you would invest 2,793 in AltShares Trust on August 30, 2024 and sell it today you would lose (3.00) from holding AltShares Trust or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
EA Series Trust vs. AltShares Trust
Performance |
| Timeline |
| EA Series Trust |
| AltShares Trust |
EA Series and AltShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and AltShares Trust
The main advantage of trading using opposite EA Series and AltShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, AltShares Trust 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 AltShares Trust will offset losses from the drop in AltShares Trust's long position.| EA Series vs. Vanguard Total Stock | EA Series vs. SPDR SP 500 | EA Series vs. iShares Core SP | EA Series vs. Vanguard Total Bond |
| AltShares Trust vs. Albany International | AltShares Trust vs. Acadia Realty Trust | AltShares Trust vs. AptarGroup | AltShares Trust vs. Applied Industrial Technologies |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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