Correlation Between IShares Russell and EA Series
Can any of the company-specific risk be diversified away by investing in both IShares Russell 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 Russell 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 Russell Mid Cap and EA Series Trust, you can compare the effects of market volatilities on IShares Russell 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 Russell with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and EA Series.
Diversification Opportunities for IShares Russell and EA Series
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and STXM is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell Mid Cap 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 Russell 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 Russell Mid Cap 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 Russell i.e., IShares Russell and EA Series go up and down completely randomly.
Pair Corralation between IShares Russell and EA Series
Considering the 90-day investment horizon IShares Russell is expected to generate 90.21 times less return on investment than EA Series. But when comparing it to its historical volatility, iShares Russell Mid Cap is 85.09 times less risky than EA Series. It trades about 0.08 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.00 in EA Series Trust on August 26, 2024 and sell it today you would earn a total of 2,796 from holding EA Series Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 32.19% |
| Values | Daily Returns |
iShares Russell Mid Cap vs. EA Series Trust
Performance |
| Timeline |
| iShares Russell Mid |
| EA Series Trust |
IShares Russell and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and EA Series
The main advantage of trading using opposite IShares Russell and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell 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 Russell vs. iShares Russell Mid Cap | IShares Russell vs. iShares Russell 1000 | IShares Russell vs. iShares Russell Mid Cap | IShares Russell vs. iShares Russell 3000 |
| EA Series vs. Vanguard Mid Cap Index | EA Series vs. Vanguard Extended Market | EA Series vs. iShares Core SP | EA Series vs. SPDR SP MIDCAP |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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