Correlation Between EA Series and FundX Investment
Can any of the company-specific risk be diversified away by investing in both EA Series and FundX Investment 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 FundX Investment 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 FundX Investment Trust, you can compare the effects of market volatilities on EA Series and FundX Investment 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 FundX Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and FundX Investment.
Diversification Opportunities for EA Series and FundX Investment
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DRAI and FundX is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and FundX Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Investment 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 FundX Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Investment Trust has no effect on the direction of EA Series i.e., EA Series and FundX Investment go up and down completely randomly.
Pair Corralation between EA Series and FundX Investment
Given the investment horizon of 90 days EA Series is expected to generate 1.45 times less return on investment than FundX Investment. In addition to that, EA Series is 2.82 times more volatile than FundX Investment Trust. It trades about 0.07 of its total potential returns per unit of risk. FundX Investment Trust is currently generating about 0.28 per unit of volatility. If you would invest 2,495 in FundX Investment Trust on September 2, 2024 and sell it today you would earn a total of 43.00 from holding FundX Investment Trust or generate 1.72% 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. FundX Investment Trust
Performance |
| Timeline |
| EA Series Trust |
| FundX Investment Trust |
EA Series and FundX Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and FundX Investment
The main advantage of trading using opposite EA Series and FundX Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, FundX Investment 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 FundX Investment will offset losses from the drop in FundX Investment's long position.| EA Series vs. Northern Lights | EA Series vs. Northern Lights | EA Series vs. Northern Lights | EA Series vs. Ned Davis Research |
| FundX Investment vs. EA Series Trust | FundX Investment vs. Northern Lights | FundX Investment vs. Northern Lights | FundX Investment vs. Northern Lights |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |