Correlation Between EA Series and SPDR Bloomberg

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

Diversification Opportunities for EA Series and SPDR Bloomberg

0.46

Correlation Coefficient

EA Series  SPDR Bloomberg

Very weak diversification

The 3 months correlation between BUXX and SPDR is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and SPDR Bloomberg Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Investment 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 SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Investment has no effect on the direction of EA Series i.e., EA Series and SPDR Bloomberg go up and down completely randomly.

Pair Corralation between EA Series and SPDR Bloomberg

Given the investment horizon of 90 days EA Series is expected to generate 1.15 times less return on investment than SPDR Bloomberg. In addition to that, EA Series is 4.63 times more volatile than SPDR Bloomberg Investment. It trades about 0.16 of its total potential returns per unit of risk. SPDR Bloomberg Investment is currently generating about 0.84 per unit of volatility. If you would invest  3,059  in SPDR Bloomberg Investment on December 5, 2024 and sell it today you would earn a total of  15.00  from holding SPDR Bloomberg Investment or generate 0.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

EA Series Trust  vs.  SPDR Bloomberg Investment

EA Series Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, EA Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SPDR Bloomberg Investment

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg Investment are ranked lower than 56 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SPDR Bloomberg is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with EA Series and SPDR Bloomberg

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

The idea behind EA Series Trust and SPDR Bloomberg Investment 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.