Correlation Between EA Series and Freedom Day
Can any of the company-specific risk be diversified away by investing in both EA Series and Freedom Day 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 Freedom Day 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 Freedom Day Dividend, you can compare the effects of market volatilities on EA Series and Freedom Day 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 Freedom Day. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Freedom Day.
Diversification Opportunities for EA Series and Freedom Day
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FTWO and Freedom is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Freedom Day Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Day Dividend 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 Freedom Day. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Day Dividend has no effect on the direction of EA Series i.e., EA Series and Freedom Day go up and down completely randomly.
Pair Corralation between EA Series and Freedom Day
Given the investment horizon of 90 days EA Series is expected to generate 2.05 times less return on investment than Freedom Day. In addition to that, EA Series is 1.28 times more volatile than Freedom Day Dividend. It trades about 0.14 of its total potential returns per unit of risk. Freedom Day Dividend is currently generating about 0.37 per unit of volatility. If you would invest 3,310 in Freedom Day Dividend on September 2, 2024 and sell it today you would earn a total of 222.00 from holding Freedom Day Dividend or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. Freedom Day Dividend
Performance |
| Timeline |
| EA Series Trust |
| Freedom Day Dividend |
EA Series and Freedom Day Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Freedom Day
The main advantage of trading using opposite EA Series and Freedom Day positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Freedom Day 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 Freedom Day will offset losses from the drop in Freedom Day's long position.| EA Series vs. Freedom Day Dividend | EA Series vs. iShares MSCI China | EA Series vs. iShares Dividend and | EA Series vs. SmartETFs Dividend Builder |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |