Correlation Between EA Series and Davis Select
Can any of the company-specific risk be diversified away by investing in both EA Series and Davis Select 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 EA Series and Davis Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EA Series Trust and Davis Select International, you can compare the effects of market volatilities on EA Series and Davis Select 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 EA Series with a short position of Davis Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Davis Select.
Diversification Opportunities for EA Series and Davis Select
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MDLV and Davis is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Davis Select International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davis Select Interna and EA Series 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 EA Series Trust are associated (or correlated) with Davis Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davis Select Interna has no effect on the direction of EA Series i.e., EA Series and Davis Select go up and down completely randomly.
Pair Corralation between EA Series and Davis Select
Given the investment horizon of 90 days EA Series is expected to generate 1.79 times less return on investment than Davis Select. But when comparing it to its historical volatility, EA Series Trust is 2.14 times less risky than Davis Select. It trades about 0.06 of its potential returns per unit of risk. Davis Select International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,691 in Davis Select International on December 1, 2024 and sell it today you would earn a total of 605.00 from holding Davis Select International or generate 35.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.72% |
| Values | Daily Returns |
EA Series Trust vs. Davis Select International
Performance |
| Timeline |
| EA Series Trust |
| Davis Select Interna |
EA Series and Davis Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Davis Select
The main advantage of trading using opposite EA Series and Davis Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Davis Select 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 Davis Select will offset losses from the drop in Davis Select's long position.| EA Series vs. FT Vest Equity | EA Series vs. Northern Lights | EA Series vs. Dimensional International High | EA Series vs. First Trust Exchange Traded |
| Davis Select vs. Davis Select Worldwide | Davis Select vs. Davis Select Financial | Davis Select vs. First Trust Dorsey |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |