Correlation Between EA Series and WisdomTree Managed
Can any of the company-specific risk be diversified away by investing in both EA Series and WisdomTree Managed 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 WisdomTree Managed 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 WisdomTree Managed Futures, you can compare the effects of market volatilities on EA Series and WisdomTree Managed 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 WisdomTree Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and WisdomTree Managed.
Diversification Opportunities for EA Series and WisdomTree Managed
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between DRAI and WisdomTree is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and WisdomTree Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Managed 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 WisdomTree Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Managed has no effect on the direction of EA Series i.e., EA Series and WisdomTree Managed go up and down completely randomly.
Pair Corralation between EA Series and WisdomTree Managed
Given the investment horizon of 90 days EA Series Trust is expected to under-perform the WisdomTree Managed. In addition to that, EA Series is 1.6 times more volatile than WisdomTree Managed Futures. It trades about -0.05 of its total potential returns per unit of risk. WisdomTree Managed Futures is currently generating about 0.0 per unit of volatility. If you would invest 3,602 in WisdomTree Managed Futures on August 26, 2024 and sell it today you would lose (27.00) from holding WisdomTree Managed Futures or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.17% |
| Values | Daily Returns |
EA Series Trust vs. WisdomTree Managed Futures
Performance |
| Timeline |
| EA Series Trust |
| WisdomTree Managed |
EA Series and WisdomTree Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and WisdomTree Managed
The main advantage of trading using opposite EA Series and WisdomTree Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, WisdomTree Managed 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 WisdomTree Managed will offset losses from the drop in WisdomTree Managed's long position.| EA Series vs. Tidal Trust II | EA Series vs. ProShares VIX Mid Term | EA Series vs. ProShares VIX Short Term | EA Series vs. LHA Market State |
| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. WisdomTree CBOE SP |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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