Correlation Between EA Series and ETF Opportunities

Can any of the company-specific risk be diversified away by investing in both EA Series and ETF Opportunities 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 ETF Opportunities 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 ETF Opportunities Trust, you can compare the effects of market volatilities on EA Series and ETF Opportunities 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 ETF Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and ETF Opportunities.

Diversification Opportunities for EA Series and ETF Opportunities

0.23

Correlation Coefficient

EA Series  ETF Opportunities

Modest diversification

The 3 months correlation between DRLL and ETF is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and ETF Opportunities Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Opportunities Trust 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 ETF Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Opportunities Trust has no effect on the direction of EA Series i.e., EA Series and ETF Opportunities go up and down completely randomly.

Pair Corralation between EA Series and ETF Opportunities

Given the investment horizon of 90 days EA Series Trust is expected to generate 1.43 times more return on investment than ETF Opportunities. However, EA Series is 1.43 times more volatile than ETF Opportunities Trust. It trades about 0.04 of its potential returns per unit of risk. ETF Opportunities Trust is currently generating about 0.06 per unit of risk. If you would invest  2,435  in EA Series Trust on February 21, 2024 and sell it today you would earn a total of  680.00  from holding EA Series Trust or generate 27.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.51%
Values	Daily Returns

EA Series Trust  vs.  ETF Opportunities Trust

EA Series Trust

Risk-Adjusted Performance

13 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal essential indicators, EA Series may actually be approaching a critical reversion point that can send shares even higher in June 2024.

ETF Opportunities Trust

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ETF Opportunities Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ETF Opportunities is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EA Series and ETF Opportunities

The main advantage of trading using opposite EA Series and ETF Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, ETF Opportunities 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 ETF Opportunities will offset losses from the drop in ETF Opportunities' long position.

The idea behind EA Series Trust and ETF Opportunities Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.