Correlation Between EA Series and VanEck Energy

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both EA Series and VanEck Energy 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 VanEck Energy 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 VanEck Energy Income, you can compare the effects of market volatilities on EA Series and VanEck Energy 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 VanEck Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and VanEck Energy.

Diversification Opportunities for EA Series and VanEck Energy

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between DRLL and VanEck is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and VanEck Energy Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Energy Income 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 VanEck Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Energy Income has no effect on the direction of EA Series i.e., EA Series and VanEck Energy go up and down completely randomly.

Pair Corralation between EA Series and VanEck Energy

Given the investment horizon of 90 days EA Series Trust is expected to generate 1.05 times more return on investment than VanEck Energy. However, EA Series is 1.05 times more volatile than VanEck Energy Income. It trades about 0.15 of its potential returns per unit of risk. VanEck Energy Income is currently generating about 0.12 per unit of risk. If you would invest  2,675  in EA Series Trust on December 27, 2024 and sell it today you would earn a total of  329.00  from holding EA Series Trust or generate 12.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy98.36%
ValuesDaily Returns

EA Series Trust  vs.  VanEck Energy Income

 Performance 
       Timeline  
EA Series Trust 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal essential indicators, EA Series disclosed solid returns over the last few months and may actually be approaching a breakup point.
VanEck Energy Income 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Energy Income are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, VanEck Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

EA Series and VanEck Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EA Series and VanEck Energy

The main advantage of trading using opposite EA Series and VanEck Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, VanEck Energy 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 VanEck Energy will offset losses from the drop in VanEck Energy's long position.
The idea behind EA Series Trust and VanEck Energy Income 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.