Correlation Between EA Series and Exchange Traded
Can any of the company-specific risk be diversified away by investing in both EA Series and Exchange Traded 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 Exchange Traded 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 Exchange Traded Concepts, you can compare the effects of market volatilities on EA Series and Exchange Traded 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 Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Exchange Traded.
Diversification Opportunities for EA Series and Exchange Traded
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between STXD and Exchange is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts 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 Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of EA Series i.e., EA Series and Exchange Traded go up and down completely randomly.
Pair Corralation between EA Series and Exchange Traded
Given the investment horizon of 90 days EA Series is expected to generate 5.33 times less return on investment than Exchange Traded. But when comparing it to its historical volatility, EA Series Trust is 1.2 times less risky than Exchange Traded. It trades about 0.09 of its potential returns per unit of risk. Exchange Traded Concepts is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 2,660 in Exchange Traded Concepts on August 30, 2024 and sell it today you would earn a total of 221.00 from holding Exchange Traded Concepts or generate 8.31% 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. Exchange Traded Concepts
Performance |
| Timeline |
| EA Series Trust |
| Exchange Traded Concepts |
EA Series and Exchange Traded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Exchange Traded
The main advantage of trading using opposite EA Series and Exchange Traded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Exchange Traded 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 Exchange Traded will offset losses from the drop in Exchange Traded's long position.| EA Series vs. JPMorgan BetaBuilders International | EA Series vs. JPMorgan Core Plus | EA Series vs. JPMorgan BetaBuilders Canada | EA Series vs. JPMorgan Emerging Markets |
| Exchange Traded vs. First Trust Exchange Traded | Exchange Traded vs. Ultimus Managers Trust | Exchange Traded vs. Horizon Kinetics Medical | Exchange Traded vs. Harbor Health Care |
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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