Correlation Between EA Series and PeakShares Sector
Can any of the company-specific risk be diversified away by investing in both EA Series and PeakShares Sector 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 PeakShares Sector 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 PeakShares Sector Rotation, you can compare the effects of market volatilities on EA Series and PeakShares Sector 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 PeakShares Sector. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and PeakShares Sector.
Diversification Opportunities for EA Series and PeakShares Sector
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DRAI and PeakShares is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and PeakShares Sector Rotation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PeakShares Sector 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 PeakShares Sector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PeakShares Sector has no effect on the direction of EA Series i.e., EA Series and PeakShares Sector go up and down completely randomly.
Pair Corralation between EA Series and PeakShares Sector
Given the investment horizon of 90 days EA Series is expected to generate 2.49 times less return on investment than PeakShares Sector. In addition to that, EA Series is 1.15 times more volatile than PeakShares Sector Rotation. It trades about 0.02 of its total potential returns per unit of risk. PeakShares Sector Rotation is currently generating about 0.05 per unit of volatility. If you would invest 2,842 in PeakShares Sector Rotation on September 12, 2024 and sell it today you would earn a total of 22.00 from holding PeakShares Sector Rotation or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. PeakShares Sector Rotation
Performance |
| Timeline |
| EA Series Trust |
| PeakShares Sector |
EA Series and PeakShares Sector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and PeakShares Sector
The main advantage of trading using opposite EA Series and PeakShares Sector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, PeakShares Sector 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 PeakShares Sector will offset losses from the drop in PeakShares Sector'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 |
| PeakShares Sector vs. Freedom Day Dividend | PeakShares Sector vs. Franklin Templeton ETF | PeakShares Sector vs. iShares MSCI China | PeakShares Sector vs. Tidal Trust II |
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.
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