Correlation Between EA Series and GPOW
Can any of the company-specific risk be diversified away by investing in both EA Series and GPOW 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 GPOW 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 GPOW, you can compare the effects of market volatilities on EA Series and GPOW 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 GPOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and GPOW.
Diversification Opportunities for EA Series and GPOW
Very poor diversification
The 3 months correlation between DRLL and GPOW is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and GPOW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPOW 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 GPOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPOW has no effect on the direction of EA Series i.e., EA Series and GPOW go up and down completely randomly.
Pair Corralation between EA Series and GPOW
Given the investment horizon of 90 days EA Series is expected to generate 4.16 times less return on investment than GPOW. In addition to that, EA Series is 1.3 times more volatile than GPOW. It trades about 0.02 of its total potential returns per unit of risk. GPOW is currently generating about 0.1 per unit of volatility. If you would invest 3,961 in GPOW on September 12, 2024 and sell it today you would earn a total of 1,419 from holding GPOW or generate 35.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
EA Series Trust vs. GPOW
Performance |
| Timeline |
| EA Series Trust |
| GPOW |
EA Series and GPOW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and GPOW
The main advantage of trading using opposite EA Series and GPOW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, GPOW 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 GPOW will offset losses from the drop in GPOW's long position.| EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. Rumble Inc | EA Series vs. EA Series Trust |
| GPOW vs. Ultimus Managers Trust | GPOW vs. Direxion Daily SP | GPOW vs. EA Series Trust | GPOW vs. Global X MLP |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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