Correlation Between EA Series and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both EA Series and SPDR Kensho 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 SPDR Kensho 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 SPDR Kensho Clean, you can compare the effects of market volatilities on EA Series and SPDR Kensho 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 SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and SPDR Kensho.
Diversification Opportunities for EA Series and SPDR Kensho
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STXD and SPDR is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and SPDR Kensho Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho Clean 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 SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho Clean has no effect on the direction of EA Series i.e., EA Series and SPDR Kensho go up and down completely randomly.
Pair Corralation between EA Series and SPDR Kensho
Given the investment horizon of 90 days EA Series is expected to generate 2.52 times less return on investment than SPDR Kensho. But when comparing it to its historical volatility, EA Series Trust is 2.75 times less risky than SPDR Kensho. It trades about 0.07 of its potential returns per unit of risk. SPDR Kensho Clean is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,327 in SPDR Kensho Clean on August 28, 2024 and sell it today you would earn a total of 148.00 from holding SPDR Kensho Clean or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. SPDR Kensho Clean
Performance |
| Timeline |
| EA Series Trust |
| SPDR Kensho Clean |
EA Series and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and SPDR Kensho
The main advantage of trading using opposite EA Series and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, SPDR Kensho 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 SPDR Kensho will offset losses from the drop in SPDR Kensho's long position.| EA Series vs. Morningstar Unconstrained Allocation | EA Series vs. High Yield Municipal Fund | EA Series vs. Via Renewables | EA Series vs. Knife River |
| SPDR Kensho vs. EA Series Trust | SPDR Kensho vs. EA Series Trust | SPDR Kensho vs. Rumble Inc | SPDR Kensho vs. EA Series Trust |
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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