Correlation Between EA Series and Point Bridge
Can any of the company-specific risk be diversified away by investing in both EA Series and Point Bridge 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 Point Bridge 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 Point Bridge GOP, you can compare the effects of market volatilities on EA Series and Point Bridge 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 Point Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Point Bridge.
Diversification Opportunities for EA Series and Point Bridge
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between STRV and Point is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Point Bridge GOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Point Bridge GOP 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 Point Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Point Bridge GOP has no effect on the direction of EA Series i.e., EA Series and Point Bridge go up and down completely randomly.
Pair Corralation between EA Series and Point Bridge
Given the investment horizon of 90 days EA Series is expected to generate 1.38 times less return on investment than Point Bridge. But when comparing it to its historical volatility, EA Series Trust is 1.27 times less risky than Point Bridge. It trades about 0.36 of its potential returns per unit of risk. Point Bridge GOP is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 4,851 in Point Bridge GOP on September 2, 2024 and sell it today you would earn a total of 398.00 from holding Point Bridge GOP or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. Point Bridge GOP
Performance |
| Timeline |
| EA Series Trust |
| Point Bridge GOP |
EA Series and Point Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Point Bridge
The main advantage of trading using opposite EA Series and Point Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Point Bridge 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 Point Bridge will offset losses from the drop in Point Bridge's long position.| EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust |
| Point Bridge vs. SPDR SP Dividend | Point Bridge vs. Pacer Cash Cows | Point Bridge vs. iShares SP Mid Cap | Point Bridge vs. WisdomTree MidCap Dividend |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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