Correlation Between EA Series and Vanguard Large
Can any of the company-specific risk be diversified away by investing in both EA Series and Vanguard Large 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 Vanguard Large 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 Vanguard Large Cap Index, you can compare the effects of market volatilities on EA Series and Vanguard Large 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 Vanguard Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Vanguard Large.
Diversification Opportunities for EA Series and Vanguard Large
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MDLV and Vanguard is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Vanguard Large Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Large Cap 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 Vanguard Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Large Cap has no effect on the direction of EA Series i.e., EA Series and Vanguard Large go up and down completely randomly.
Pair Corralation between EA Series and Vanguard Large
Given the investment horizon of 90 days EA Series is expected to generate 1.64 times less return on investment than Vanguard Large. But when comparing it to its historical volatility, EA Series Trust is 1.45 times less risky than Vanguard Large. It trades about 0.12 of its potential returns per unit of risk. Vanguard Large Cap Index is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 22,254 in Vanguard Large Cap Index on August 29, 2024 and sell it today you would earn a total of 5,411 from holding Vanguard Large Cap Index or generate 24.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. Vanguard Large Cap Index
Performance |
| Timeline |
| EA Series Trust |
| Vanguard Large Cap |
EA Series and Vanguard Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Vanguard Large
The main advantage of trading using opposite EA Series and Vanguard Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Vanguard Large 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 Vanguard Large will offset losses from the drop in Vanguard Large'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 |
| Vanguard Large vs. Vanguard Mid Cap Index | Vanguard Large vs. Vanguard Small Cap Index | Vanguard Large vs. Vanguard Extended Market | Vanguard Large vs. Vanguard Small Cap Growth |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |