Correlation Between Alpha Architect and EA Series
Can any of the company-specific risk be diversified away by investing in both Alpha Architect and EA Series 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 Alpha Architect and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Architect High and EA Series Trust, you can compare the effects of market volatilities on Alpha Architect and EA Series 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 Alpha Architect with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Architect and EA Series.
Diversification Opportunities for Alpha Architect and EA Series
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alpha and CAOS is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Architect High and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust and Alpha Architect 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 Alpha Architect High are associated (or correlated) with EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Alpha Architect i.e., Alpha Architect and EA Series go up and down completely randomly.
Pair Corralation between Alpha Architect and EA Series
Given the investment horizon of 90 days Alpha Architect is expected to generate 1.78 times less return on investment than EA Series. In addition to that, Alpha Architect is 1.44 times more volatile than EA Series Trust. It trades about 0.04 of its total potential returns per unit of risk. EA Series Trust is currently generating about 0.1 per unit of volatility. If you would invest 8,435 in EA Series Trust on November 28, 2024 and sell it today you would earn a total of 344.00 from holding EA Series Trust or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Architect High vs. EA Series Trust
Performance |
| Timeline |
| Alpha Architect High |
| EA Series Trust |
Alpha Architect and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Architect and EA Series
The main advantage of trading using opposite Alpha Architect and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Architect position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| Alpha Architect vs. Aptus Defined Risk | Alpha Architect vs. Discipline Fund ETF | Alpha Architect vs. iShares Core Aggressive | Alpha Architect vs. iShares Core Conservative |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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