Correlation Between Bitcoin and EA Series

Can any of the company-specific risk be diversified away by investing in both Bitcoin 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 Bitcoin and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitcoin and EA Series Trust, you can compare the effects of market volatilities on Bitcoin 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 Bitcoin with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and EA Series.

Diversification Opportunities for Bitcoin and EA Series

-0.21

Correlation Coefficient

Bitcoin  EA Series

Very good diversification

The 3 months correlation between Bitcoin and EMPB is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin 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 Bitcoin 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 Bitcoin 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 Bitcoin i.e., Bitcoin and EA Series go up and down completely randomly.

Pair Corralation between Bitcoin and EA Series

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the EA Series. In addition to that, Bitcoin is 3.1 times more volatile than EA Series Trust. It trades about -0.09 of its total potential returns per unit of risk. EA Series Trust is currently generating about 0.02 per unit of volatility. If you would invest  2,536  in EA Series Trust on December 20, 2024 and sell it today you would earn a total of  24.00  from holding EA Series Trust or generate 0.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Bitcoin  vs.  EA Series Trust

Bitcoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Bitcoin shareholders.

EA Series Trust

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, EA Series is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bitcoin and EA Series

The main advantage of trading using opposite Bitcoin and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin 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.

The idea behind Bitcoin and EA Series 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..