Correlation Between EA Series and FT Cboe
Can any of the company-specific risk be diversified away by investing in both EA Series and FT Cboe 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 FT Cboe 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 FT Cboe Vest, you can compare the effects of market volatilities on EA Series and FT Cboe 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 FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and FT Cboe.
Diversification Opportunities for EA Series and FT Cboe
Poor diversification
The 3 months correlation between MDLV and DJUN is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest 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 FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of EA Series i.e., EA Series and FT Cboe go up and down completely randomly.
Pair Corralation between EA Series and FT Cboe
Given the investment horizon of 90 days EA Series Trust is expected to generate 1.43 times more return on investment than FT Cboe. However, EA Series is 1.43 times more volatile than FT Cboe Vest. It trades about 0.14 of its potential returns per unit of risk. FT Cboe Vest is currently generating about 0.17 per unit of risk. If you would invest 2,260 in EA Series Trust on August 25, 2024 and sell it today you would earn a total of 478.00 from holding EA Series Trust or generate 21.15% 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. FT Cboe Vest
Performance |
| Timeline |
| EA Series Trust |
| FT Cboe Vest |
EA Series and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and FT Cboe
The main advantage of trading using opposite EA Series and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe'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 |
| FT Cboe vs. First Trust Cboe | FT Cboe vs. FT Cboe Vest | FT Cboe vs. Innovator SP 500 | FT Cboe vs. FT Cboe Vest |
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 CEOs Directory module to screen CEOs from public companies around the world.
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