Correlation Between Exchange Traded and EA Series
Can any of the company-specific risk be diversified away by investing in both Exchange Traded 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 Exchange Traded and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Traded Concepts and EA Series Trust, you can compare the effects of market volatilities on Exchange Traded 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 Exchange Traded with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Traded and EA Series.
Diversification Opportunities for Exchange Traded and EA Series
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exchange and STRV is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts 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 Exchange Traded 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 Exchange Traded Concepts 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 Exchange Traded i.e., Exchange Traded and EA Series go up and down completely randomly.
Pair Corralation between Exchange Traded and EA Series
Given the investment horizon of 90 days Exchange Traded is expected to generate 1.32 times less return on investment than EA Series. In addition to that, Exchange Traded is 1.54 times more volatile than EA Series Trust. It trades about 0.06 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 2,434 in EA Series Trust on August 30, 2024 and sell it today you would earn a total of 1,428 from holding EA Series Trust or generate 58.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 43.84% |
| Values | Daily Returns |
Exchange Traded Concepts vs. EA Series Trust
Performance |
| Timeline |
| Exchange Traded Concepts |
| EA Series Trust |
Exchange Traded and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Traded and EA Series
The main advantage of trading using opposite Exchange Traded and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Traded 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.| Exchange Traded vs. First Trust Exchange Traded | Exchange Traded vs. Ultimus Managers Trust | Exchange Traded vs. Horizon Kinetics Medical | Exchange Traded vs. Harbor Health Care |
| EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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