Correlation Between EA Series and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both EA Series and Xtrackers MSCI 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 Xtrackers MSCI 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 Xtrackers MSCI Emerging, you can compare the effects of market volatilities on EA Series and Xtrackers MSCI 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 Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Xtrackers MSCI.
Diversification Opportunities for EA Series and Xtrackers MSCI
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STXE and Xtrackers is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Xtrackers MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI Emerging 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 Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI Emerging has no effect on the direction of EA Series i.e., EA Series and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between EA Series and Xtrackers MSCI
Given the investment horizon of 90 days EA Series is expected to generate 1.2 times less return on investment than Xtrackers MSCI. But when comparing it to its historical volatility, EA Series Trust is 1.05 times less risky than Xtrackers MSCI. It trades about 0.04 of its potential returns per unit of risk. Xtrackers MSCI Emerging is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,120 in Xtrackers MSCI Emerging on September 3, 2024 and sell it today you would earn a total of 418.00 from holding Xtrackers MSCI Emerging or generate 19.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.74% |
| Values | Daily Returns |
EA Series Trust vs. Xtrackers MSCI Emerging
Performance |
| Timeline |
| EA Series Trust |
| Xtrackers MSCI Emerging |
EA Series and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Xtrackers MSCI
The main advantage of trading using opposite EA Series and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.| EA Series vs. SCOR PK | EA Series vs. HUMANA INC | EA Series vs. Aquagold International | EA Series vs. Barloworld Ltd ADR |
| Xtrackers MSCI vs. Xtrackers MSCI EAFE | Xtrackers MSCI vs. Xtrackers MSCI All | Xtrackers MSCI vs. Xtrackers MSCI Japan | Xtrackers MSCI vs. iShares Currency Hedged |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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