Correlation Between Point Bridge and EA Series
Can any of the company-specific risk be diversified away by investing in both Point Bridge 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 Point Bridge and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Point Bridge GOP and EA Series Trust, you can compare the effects of market volatilities on Point Bridge 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 Point Bridge with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Point Bridge and EA Series.
Diversification Opportunities for Point Bridge and EA Series
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Point and DRLL is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Point Bridge GOP 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 Point Bridge 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 Point Bridge GOP 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 Point Bridge i.e., Point Bridge and EA Series go up and down completely randomly.
Pair Corralation between Point Bridge and EA Series
Given the investment horizon of 90 days Point Bridge GOP is expected to generate 0.86 times more return on investment than EA Series. However, Point Bridge GOP is 1.16 times less risky than EA Series. It trades about 0.39 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.3 per unit of risk. If you would invest 4,851 in Point Bridge GOP on September 2, 2024 and sell it today you would earn a total of 398.00 from holding Point Bridge GOP or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Point Bridge GOP vs. EA Series Trust
Performance |
| Timeline |
| Point Bridge GOP |
| EA Series Trust |
Point Bridge and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Point Bridge and EA Series
The main advantage of trading using opposite Point Bridge and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Point Bridge 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.| Point Bridge vs. SPDR SP Dividend | Point Bridge vs. Pacer Cash Cows | Point Bridge vs. iShares SP Mid Cap | Point Bridge vs. WisdomTree MidCap Dividend |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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