Correlation Between IShares SP and EA Series
Can any of the company-specific risk be diversified away by investing in both IShares SP 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 SP 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 SP 500 and EA Series Trust, you can compare the effects of market volatilities on IShares SP 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 SP with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and EA Series.
Diversification Opportunities for IShares SP and EA Series
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and STXG is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 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 SP 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 SP 500 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 SP i.e., IShares SP and EA Series go up and down completely randomly.
Pair Corralation between IShares SP and EA Series
Considering the 90-day investment horizon IShares SP is expected to generate 1.55 times less return on investment than EA Series. In addition to that, IShares SP is 1.08 times more volatile than EA Series Trust. It trades about 0.09 of its total potential returns per unit of risk. EA Series Trust is currently generating about 0.15 per unit of volatility. If you would invest 4,224 in EA Series Trust on August 28, 2024 and sell it today you would earn a total of 141.00 from holding EA Series Trust or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP 500 vs. EA Series Trust
Performance |
| Timeline |
| iShares SP 500 |
| EA Series Trust |
IShares SP and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and EA Series
The main advantage of trading using opposite IShares SP and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP 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 SP vs. Invesco Dynamic Large | IShares SP vs. Perella Weinberg Partners | IShares SP vs. HUMANA INC | IShares SP vs. Aquagold International |
| EA Series vs. Invesco Dynamic Large | EA Series vs. Perella Weinberg Partners | EA Series vs. HUMANA INC | EA Series vs. Aquagold International |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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