Correlation Between EA Series and Valued Advisers

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

Diversification Opportunities for EA Series and Valued Advisers

0.9

Correlation Coefficient

EA Series  Valued Advisers

Almost no diversification

The 3 months correlation between BUXX and Valued is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Valued Advisers Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valued Advisers 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 Valued Advisers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valued Advisers Trust has no effect on the direction of EA Series i.e., EA Series and Valued Advisers go up and down completely randomly.

Pair Corralation between EA Series and Valued Advisers

Given the investment horizon of 90 days EA Series is expected to generate 1.59 times less return on investment than Valued Advisers. But when comparing it to its historical volatility, EA Series Trust is 2.93 times less risky than Valued Advisers. It trades about 0.29 of its potential returns per unit of risk. Valued Advisers Trust is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,520  in Valued Advisers Trust on October 9, 2024 and sell it today you would earn a total of  52.00  from holding Valued Advisers Trust or generate 2.06% 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.  Valued Advisers Trust

EA Series Trust

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 23 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Valued Advisers Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valued Advisers Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Valued Advisers 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 Valued Advisers

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

The idea behind EA Series Trust and Valued Advisers 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.