Correlation Between EA Series and Vanguard Mid
Can any of the company-specific risk be diversified away by investing in both EA Series and Vanguard Mid 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 Vanguard Mid 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 Vanguard Mid Cap Index, you can compare the effects of market volatilities on EA Series and Vanguard Mid 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 Vanguard Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Vanguard Mid.
Diversification Opportunities for EA Series and Vanguard Mid
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between STXM and Vanguard is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Vanguard Mid Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Mid Cap 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 Vanguard Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mid Cap has no effect on the direction of EA Series i.e., EA Series and Vanguard Mid go up and down completely randomly.
Pair Corralation between EA Series and Vanguard Mid
Given the investment horizon of 90 days EA Series Trust is expected to generate 1.32 times more return on investment than Vanguard Mid. However, EA Series is 1.32 times more volatile than Vanguard Mid Cap Index. It trades about 0.3 of its potential returns per unit of risk. Vanguard Mid Cap Index is currently generating about 0.35 per unit of risk. If you would invest 2,617 in EA Series Trust on August 30, 2024 and sell it today you would earn a total of 198.00 from holding EA Series Trust or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. Vanguard Mid Cap Index
Performance |
| Timeline |
| EA Series Trust |
| Vanguard Mid Cap |
EA Series and Vanguard Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Vanguard Mid
The main advantage of trading using opposite EA Series and Vanguard Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Vanguard Mid 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 Vanguard Mid will offset losses from the drop in Vanguard Mid's long position.| EA Series vs. Vanguard Mid Cap Index | EA Series vs. Vanguard Extended Market | EA Series vs. iShares Core SP | EA Series vs. iShares Russell Mid Cap |
| Vanguard Mid vs. Vanguard Small Cap Index | Vanguard Mid vs. Vanguard Large Cap Index | Vanguard Mid vs. Vanguard Small Cap Growth | Vanguard Mid vs. Vanguard Small Cap Value |
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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