Correlation Between NYSE Composite and EA Series
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and EA Series Trust, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and EA Series.
Diversification Opportunities for NYSE Composite and EA Series
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and ECML is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and EA Series go up and down completely randomly.
Pair Corralation between NYSE Composite and EA Series
Assuming the 90 days trading horizon NYSE Composite is expected to generate 48.48 times less return on investment than EA Series. But when comparing it to its historical volatility, NYSE Composite is 69.26 times less risky than EA Series. It trades about 0.08 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in EA Series Trust on August 26, 2024 and sell it today you would earn a total of 3,574 from holding EA Series Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.46% |
| Values | Daily Returns |
NYSE Composite vs. EA Series Trust
Performance |
| Timeline |
NYSE Composite and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
EA Series Trust
Pair trading matchups for EA Series
Pair Trading with NYSE Composite and EA Series
The main advantage of trading using opposite NYSE Composite and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| EA Series vs. Freedom Day Dividend | EA Series vs. Davis Select International | EA Series vs. iShares MSCI China | EA Series vs. SmartETFs Dividend Builder |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |