Correlation Between EA Series and IShares Trust
Can any of the company-specific risk be diversified away by investing in both EA Series and IShares 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 IShares 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 iShares Trust, you can compare the effects of market volatilities on EA Series and IShares 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and IShares Trust.
Diversification Opportunities for EA Series and IShares Trust
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DRAI and IShares is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 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 IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of EA Series i.e., EA Series and IShares Trust go up and down completely randomly.
Pair Corralation between EA Series and IShares Trust
Given the investment horizon of 90 days EA Series Trust is expected to under-perform the IShares Trust. But the etf apears to be less risky and, when comparing its historical volatility, EA Series Trust is 51.15 times less risky than IShares Trust. The etf trades about -0.02 of its potential returns per unit of risk. The iShares Trust is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.00 in iShares Trust on September 13, 2024 and sell it today you would earn a total of 3,078 from holding iShares Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 37.46% |
| Values | Daily Returns |
EA Series Trust vs. iShares Trust
Performance |
| Timeline |
| EA Series Trust |
| iShares Trust |
EA Series and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and IShares Trust
The main advantage of trading using opposite EA Series and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, IShares 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| EA Series vs. First Trust Multi Asset | EA Series vs. Collaborative Investment Series | EA Series vs. Aptus Defined Risk | EA Series vs. Discipline Fund ETF |
| IShares Trust vs. First Trust Multi Asset | IShares Trust vs. Collaborative Investment Series | IShares Trust vs. EA Series Trust | IShares Trust 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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