Correlation Between EA Series and VanEck Oil
Can any of the company-specific risk be diversified away by investing in both EA Series and VanEck Oil 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 VanEck Oil 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 VanEck Oil Services, you can compare the effects of market volatilities on EA Series and VanEck Oil 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 VanEck Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and VanEck Oil.
Diversification Opportunities for EA Series and VanEck Oil
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STXD and VanEck is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and VanEck Oil Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Oil Services 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 VanEck Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Oil Services has no effect on the direction of EA Series i.e., EA Series and VanEck Oil go up and down completely randomly.
Pair Corralation between EA Series and VanEck Oil
Given the investment horizon of 90 days EA Series Trust is expected to generate 0.5 times more return on investment than VanEck Oil. However, EA Series Trust is 1.98 times less risky than VanEck Oil. It trades about 0.12 of its potential returns per unit of risk. VanEck Oil Services is currently generating about 0.0 per unit of risk. If you would invest 2,578 in EA Series Trust on August 29, 2024 and sell it today you would earn a total of 812.00 from holding EA Series Trust or generate 31.5% 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. VanEck Oil Services
Performance |
| Timeline |
| EA Series Trust |
| VanEck Oil Services |
EA Series and VanEck Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and VanEck Oil
The main advantage of trading using opposite EA Series and VanEck Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, VanEck Oil 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 VanEck Oil will offset losses from the drop in VanEck Oil'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 |
| VanEck Oil vs. SPDR SP Oil | VanEck Oil vs. Energy Select Sector | VanEck Oil vs. VanEck Semiconductor ETF | VanEck Oil vs. Materials Select Sector |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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