Correlation Between EA Series and Manager Directed
Can any of the company-specific risk be diversified away by investing in both EA Series and Manager Directed 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 Manager Directed 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 Manager Directed Portfolios, you can compare the effects of market volatilities on EA Series and Manager Directed 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 Manager Directed. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Manager Directed.
Diversification Opportunities for EA Series and Manager Directed
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DRAI and Manager is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Manager Directed Portfolios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manager Directed Por 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 Manager Directed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manager Directed Por has no effect on the direction of EA Series i.e., EA Series and Manager Directed go up and down completely randomly.
Pair Corralation between EA Series and Manager Directed
Given the investment horizon of 90 days EA Series Trust is expected to generate 14.72 times more return on investment than Manager Directed. However, EA Series is 14.72 times more volatile than Manager Directed Portfolios. It trades about 0.11 of its potential returns per unit of risk. Manager Directed Portfolios is currently generating about 0.36 per unit of risk. If you would invest 2,407 in EA Series Trust on September 5, 2024 and sell it today you would earn a total of 47.00 from holding EA Series Trust or generate 1.95% 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. Manager Directed Portfolios
Performance |
| Timeline |
| EA Series Trust |
| Manager Directed Por |
EA Series and Manager Directed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Manager Directed
The main advantage of trading using opposite EA Series and Manager Directed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Manager Directed 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 Manager Directed will offset losses from the drop in Manager Directed's long position.| EA Series vs. First Trust Multi Asset | EA Series vs. Collaborative Investment Series | EA Series vs. Ocean Park International | EA Series vs. Akros Monthly Payout |
| Manager Directed vs. First Trust Multi Asset | Manager Directed vs. Collaborative Investment Series | Manager Directed vs. EA Series Trust | Manager Directed vs. Ocean Park International |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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