Correlation Between EA Series and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both EA Series and Dimensional ETF 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 Dimensional ETF 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 Dimensional ETF Trust, you can compare the effects of market volatilities on EA Series and Dimensional ETF 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 Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Dimensional ETF.
Diversification Opportunities for EA Series and Dimensional ETF
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MDLV and Dimensional is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust 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 Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of EA Series i.e., EA Series and Dimensional ETF go up and down completely randomly.
Pair Corralation between EA Series and Dimensional ETF
Given the investment horizon of 90 days EA Series Trust is expected to generate 1.07 times more return on investment than Dimensional ETF. However, EA Series is 1.07 times more volatile than Dimensional ETF Trust. It trades about 0.19 of its potential returns per unit of risk. Dimensional ETF Trust is currently generating about 0.11 per unit of risk. If you would invest 2,579 in EA Series Trust on October 23, 2024 and sell it today you would earn a total of 58.00 from holding EA Series Trust or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. Dimensional ETF Trust
Performance |
| Timeline |
| EA Series Trust |
| Dimensional ETF Trust |
EA Series and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Dimensional ETF
The main advantage of trading using opposite EA Series and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Dimensional ETF 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 Dimensional ETF will offset losses from the drop in Dimensional ETF's long position.| EA Series vs. FT Vest Equity | EA Series vs. Northern Lights | EA Series vs. Dimensional International High | EA Series vs. JPMorgan Fundamental Data |
| Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional International Value | Dimensional ETF vs. Dimensional Targeted Value |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |