Correlation Between Freedom Day and EA Series
Can any of the company-specific risk be diversified away by investing in both Freedom Day 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 Freedom Day and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Day Dividend and EA Series Trust, you can compare the effects of market volatilities on Freedom Day 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 Freedom Day with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Day and EA Series.
Diversification Opportunities for Freedom Day and EA Series
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Freedom and TBG is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Day Dividend 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 Freedom Day 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 Freedom Day Dividend 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 Freedom Day i.e., Freedom Day and EA Series go up and down completely randomly.
Pair Corralation between Freedom Day and EA Series
Given the investment horizon of 90 days Freedom Day Dividend is expected to under-perform the EA Series. In addition to that, Freedom Day is 1.14 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 -0.03 per unit of volatility. If you would invest 3,322 in EA Series Trust on September 12, 2024 and sell it today you would lose (14.00) from holding EA Series Trust or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Day Dividend vs. EA Series Trust
Performance |
| Timeline |
| Freedom Day Dividend |
| EA Series Trust |
Freedom Day and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Day and EA Series
The main advantage of trading using opposite Freedom Day and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Day 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.The idea behind Freedom Day Dividend and EA Series Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| EA Series vs. Freedom Day Dividend | EA Series vs. Franklin Templeton ETF | EA Series vs. iShares MSCI China | EA Series vs. Tidal Trust II |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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