Correlation Between EA Series and USCF Midstream
Can any of the company-specific risk be diversified away by investing in both EA Series and USCF Midstream 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 USCF Midstream 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 USCF Midstream Energy, you can compare the effects of market volatilities on EA Series and USCF Midstream 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 USCF Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and USCF Midstream.
Diversification Opportunities for EA Series and USCF Midstream
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between STXD and USCF is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and USCF Midstream Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF Midstream Energy 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 USCF Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF Midstream Energy has no effect on the direction of EA Series i.e., EA Series and USCF Midstream go up and down completely randomly.
Pair Corralation between EA Series and USCF Midstream
Given the investment horizon of 90 days EA Series is expected to generate 7.94 times less return on investment than USCF Midstream. But when comparing it to its historical volatility, EA Series Trust is 1.49 times less risky than USCF Midstream. It trades about 0.09 of its potential returns per unit of risk. USCF Midstream Energy is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 4,671 in USCF Midstream Energy on August 29, 2024 and sell it today you would earn a total of 577.00 from holding USCF Midstream Energy or generate 12.35% 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. USCF Midstream Energy
Performance |
| Timeline |
| EA Series Trust |
| USCF Midstream Energy |
EA Series and USCF Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and USCF Midstream
The main advantage of trading using opposite EA Series and USCF Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, USCF Midstream 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 USCF Midstream will offset losses from the drop in USCF Midstream'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 |
| USCF Midstream vs. EA Series Trust | USCF Midstream vs. ETF Opportunities Trust | USCF Midstream vs. Global X MLP | USCF Midstream vs. indie Semiconductor |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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