Correlation Between EA Series and Aptus Defined
Can any of the company-specific risk be diversified away by investing in both EA Series and Aptus Defined 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 Aptus Defined 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 Aptus Defined Risk, you can compare the effects of market volatilities on EA Series and Aptus Defined 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 Aptus Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Aptus Defined.
Diversification Opportunities for EA Series and Aptus Defined
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DRAI and Aptus is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Aptus Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Defined Risk 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 Aptus Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Defined Risk has no effect on the direction of EA Series i.e., EA Series and Aptus Defined go up and down completely randomly.
Pair Corralation between EA Series and Aptus Defined
Given the investment horizon of 90 days EA Series is expected to generate 1.55 times less return on investment than Aptus Defined. In addition to that, EA Series is 1.82 times more volatile than Aptus Defined Risk. It trades about 0.02 of its total potential returns per unit of risk. Aptus Defined Risk is currently generating about 0.05 per unit of volatility. If you would invest 2,818 in Aptus Defined Risk on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Aptus Defined Risk or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. Aptus Defined Risk
Performance |
| Timeline |
| EA Series Trust |
| Aptus Defined Risk |
EA Series and Aptus Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Aptus Defined
The main advantage of trading using opposite EA Series and Aptus Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Aptus Defined 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 Aptus Defined will offset losses from the drop in Aptus Defined'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 |
| Aptus Defined vs. Amplify BlackSwan Growth | Aptus Defined vs. Aptus Collared Income | Aptus Defined vs. Aptus Drawdown Managed | Aptus Defined vs. Cambria Tail 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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