Correlation Between EA Series and American Century
Can any of the company-specific risk be diversified away by investing in both EA Series and American Century 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 American Century 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 American Century ETF, you can compare the effects of market volatilities on EA Series and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and American Century.
Diversification Opportunities for EA Series and American Century
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DRAI and American is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and American Century ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century ETF 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century ETF has no effect on the direction of EA Series i.e., EA Series and American Century go up and down completely randomly.
Pair Corralation between EA Series and American Century
Given the investment horizon of 90 days EA Series Trust is expected to under-perform the American Century. In addition to that, EA Series is 1.4 times more volatile than American Century ETF. It trades about -0.02 of its total potential returns per unit of risk. American Century ETF is currently generating about 0.05 per unit of volatility. If you would invest 5,105 in American Century ETF on September 12, 2024 and sell it today you would earn a total of 717.00 from holding American Century ETF or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 30.68% |
| Values | Daily Returns |
EA Series Trust vs. American Century ETF
Performance |
| Timeline |
| EA Series Trust |
| American Century ETF |
EA Series and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and American Century
The main advantage of trading using opposite EA Series and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century'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 |
| American Century vs. First Trust Multi Asset | American Century vs. Collaborative Investment Series | American Century vs. EA Series Trust | American Century vs. Aptus Defined Risk |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |