Correlation Between EA Series and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both EA Series and Vanguard Total 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 Vanguard Total 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 Vanguard Total Stock, you can compare the effects of market volatilities on EA Series and Vanguard Total 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 Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Vanguard Total.
Diversification Opportunities for EA Series and Vanguard Total
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DTAN and Vanguard is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Vanguard Total Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Stock 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 Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Stock has no effect on the direction of EA Series i.e., EA Series and Vanguard Total go up and down completely randomly.
Pair Corralation between EA Series and Vanguard Total
Given the investment horizon of 90 days EA Series Trust is expected to generate 1.02 times more return on investment than Vanguard Total. However, EA Series is 1.02 times more volatile than Vanguard Total Stock. It trades about 0.24 of its potential returns per unit of risk. Vanguard Total Stock is currently generating about 0.16 per unit of risk. If you would invest 2,476 in EA Series Trust on September 13, 2024 and sell it today you would earn a total of 70.00 from holding EA Series Trust or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
EA Series Trust vs. Vanguard Total Stock
Performance |
| Timeline |
| EA Series Trust |
| Vanguard Total Stock |
EA Series and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Vanguard Total
The main advantage of trading using opposite EA Series and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.| EA Series vs. Vanguard Total Stock | EA Series vs. SPDR SP 500 | EA Series vs. iShares Core SP | EA Series vs. Vanguard Total Bond |
| Vanguard Total vs. Vanguard SP 500 | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Real Estate | Vanguard Total vs. Vanguard Total Bond |
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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