Correlation Between EA Series and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both EA Series and IShares 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 IShares 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 iShares MSCI World, you can compare the effects of market volatilities on EA Series and IShares 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and IShares MSCI.
Diversification Opportunities for EA Series and IShares MSCI
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between STXK and IShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and iShares MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI World 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI World has no effect on the direction of EA Series i.e., EA Series and IShares MSCI go up and down completely randomly.
Pair Corralation between EA Series and IShares MSCI
Given the investment horizon of 90 days EA Series Trust is expected to generate 1.7 times more return on investment than IShares MSCI. However, EA Series is 1.7 times more volatile than iShares MSCI World. It trades about 0.09 of its potential returns per unit of risk. iShares MSCI World is currently generating about 0.13 per unit of risk. If you would invest 2,557 in EA Series Trust on August 26, 2024 and sell it today you would earn a total of 809.00 from holding EA Series Trust or generate 31.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. iShares MSCI World
Performance |
| Timeline |
| EA Series Trust |
| iShares MSCI World |
EA Series and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and IShares MSCI
The main advantage of trading using opposite EA Series and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, IShares 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| EA Series vs. Invesco PureBeta MSCI | EA Series vs. Aquagold International | EA Series vs. Morningstar Unconstrained Allocation | EA Series vs. High Yield Municipal Fund |
| IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. BMO Long Federal | IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. Vanguard Total Market |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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