Correlation Between SPDR SP and EA Series
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and EA Series Trust, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and EA Series.
Diversification Opportunities for SPDR SP and EA Series
Very weak diversification
The 3 months correlation between SPDR and DRAI is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 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 SPDR SP 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 SPDR SP 500 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 SPDR SP i.e., SPDR SP and EA Series go up and down completely randomly.
Pair Corralation between SPDR SP and EA Series
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 0.77 times more return on investment than EA Series. However, SPDR SP 500 is 1.31 times less risky than EA Series. It trades about 0.14 of its potential returns per unit of risk. EA Series Trust is currently generating about -0.04 per unit of risk. If you would invest 57,376 in SPDR SP 500 on August 30, 2024 and sell it today you would earn a total of 2,507 from holding SPDR SP 500 or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. EA Series Trust
Performance |
| Timeline |
| SPDR SP 500 |
| EA Series Trust |
SPDR SP and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and EA Series
The main advantage of trading using opposite SPDR SP and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. FT Vest Equity | SPDR SP vs. Northern Lights | SPDR SP vs. Dimensional International High | SPDR SP vs. First Trust Exchange Traded |
| EA Series vs. Vanguard Total Stock | EA Series vs. SPDR SP 500 | EA Series vs. iShares Core SP | EA Series vs. Vanguard Total Bond |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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