Correlation Between IShares Core and EA Series
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and EA Series Trust, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and EA Series.
Diversification Opportunities for IShares Core and EA Series
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and STXE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI 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 IShares Core 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 iShares Core MSCI 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 IShares Core i.e., IShares Core and EA Series go up and down completely randomly.
Pair Corralation between IShares Core and EA Series
Given the investment horizon of 90 days iShares Core MSCI is expected to under-perform the EA Series. In addition to that, IShares Core is 1.4 times more volatile than EA Series Trust. It trades about -0.11 of its total potential returns per unit of risk. EA Series Trust is currently generating about -0.12 per unit of volatility. If you would invest 2,947 in EA Series Trust on September 1, 2024 and sell it today you would lose (56.00) from holding EA Series Trust or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Core MSCI vs. EA Series Trust
Performance |
| Timeline |
| iShares Core MSCI |
| EA Series Trust |
IShares Core and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and EA Series
The main advantage of trading using opposite IShares Core and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. Xtrackers MSCI Emerging | IShares Core vs. FlexShares Morningstar Emerging | IShares Core vs. First Trust Emerging |
| EA Series vs. Xtrackers MSCI Emerging | EA Series vs. FlexShares Morningstar Emerging | EA Series vs. First Trust Emerging |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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