Correlation Between EA Series and Global X
Can any of the company-specific risk be diversified away by investing in both EA Series and Global X 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 Global X 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 Global X MLP, you can compare the effects of market volatilities on EA Series and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Global X.
Diversification Opportunities for EA Series and Global X
Poor diversification
The 3 months correlation between DRLL and Global is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Global X MLP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MLP 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MLP has no effect on the direction of EA Series i.e., EA Series and Global X go up and down completely randomly.
Pair Corralation between EA Series and Global X
Given the investment horizon of 90 days EA Series Trust is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, EA Series Trust is 1.05 times less risky than Global X. The etf trades about -0.04 of its potential returns per unit of risk. The Global X MLP is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,272 in Global X MLP on November 27, 2024 and sell it today you would lose (105.00) from holding Global X MLP or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. Global X MLP
Performance |
| Timeline |
| EA Series Trust |
| Global X MLP |
EA Series and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Global X
The main advantage of trading using opposite EA Series and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. Global X MLP | Global X vs. Alerian Energy Infrastructure | Global X vs. First Trust North | Global X vs. Tortoise North American |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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