Correlation Between ERShares Private and EA Series

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

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

Diversification Opportunities for ERShares Private and EA Series

-0.47

Correlation Coefficient

ERShares Private  EA Series

Very good diversification

The 3 months correlation between ERShares and MDLV is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ERShares Private Public Crosso 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 ERShares Private 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 ERShares Private Public Crossover 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 ERShares Private i.e., ERShares Private and EA Series go up and down completely randomly.

Pair Corralation between ERShares Private and EA Series

Given the investment horizon of 90 days ERShares Private Public Crossover is expected to under-perform the EA Series. In addition to that, ERShares Private is 2.26 times more volatile than EA Series Trust. It trades about -0.1 of its total potential returns per unit of risk. EA Series Trust is currently generating about 0.13 per unit of volatility. If you would invest  2,583  in EA Series Trust on December 27, 2024 and sell it today you would earn a total of  144.00  from holding EA Series Trust or generate 5.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

ERShares Private Public Crosso  vs.  EA Series Trust

ERShares Private Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days ERShares Private Public Crossover has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

EA Series Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, EA Series is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with ERShares Private and EA Series

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

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.