Correlation Between USCF Midstream and EA Series
Can any of the company-specific risk be diversified away by investing in both USCF Midstream and EA Series 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 USCF Midstream and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USCF Midstream Energy and EA Series Trust, you can compare the effects of market volatilities on USCF Midstream and EA Series 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 USCF Midstream with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of USCF Midstream and EA Series.
Diversification Opportunities for USCF Midstream and EA Series
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between USCF and STRV is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding USCF Midstream Energy and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust and USCF Midstream 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 USCF Midstream Energy are associated (or correlated) with EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of USCF Midstream i.e., USCF Midstream and EA Series go up and down completely randomly.
Pair Corralation between USCF Midstream and EA Series
Considering the 90-day investment horizon USCF Midstream Energy is expected to generate 1.31 times more return on investment than EA Series. However, USCF Midstream is 1.31 times more volatile than EA Series Trust. It trades about 0.46 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.18 per unit of risk. 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
USCF Midstream Energy vs. EA Series Trust
Performance |
| Timeline |
| USCF Midstream Energy |
| EA Series Trust |
USCF Midstream and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USCF Midstream and EA Series
The main advantage of trading using opposite USCF Midstream and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USCF Midstream position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| USCF Midstream vs. EA Series Trust | USCF Midstream vs. ETF Opportunities Trust | USCF Midstream vs. Global X MLP | USCF Midstream vs. indie Semiconductor |
| EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust |
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 Stocks Directory module to find actively traded stocks across global markets.
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