Correlation Between IShares Ethereum and EA Series

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

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

Diversification Opportunities for IShares Ethereum and EA Series

1.0

Correlation Coefficient

IShares Ethereum  EA Series

No risk reduction

The 3 months correlation between IShares and ARKZ is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Ethereum Trust 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 IShares Ethereum 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 iShares Ethereum Trust 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 IShares Ethereum i.e., IShares Ethereum and EA Series go up and down completely randomly.

Pair Corralation between IShares Ethereum and EA Series

Given the investment horizon of 90 days iShares Ethereum Trust is expected to generate 1.01 times more return on investment than EA Series. However, IShares Ethereum is 1.01 times more volatile than EA Series Trust. It trades about 0.16 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.16 per unit of risk. If you would invest  1,854  in iShares Ethereum Trust on September 2, 2024 and sell it today you would earn a total of  865.00  from holding iShares Ethereum Trust or generate 46.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

iShares Ethereum Trust  vs.  EA Series Trust

iShares Ethereum Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Ethereum Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent technical indicators, IShares Ethereum sustained solid returns over the last few months and may actually be approaching a breakup point.

EA Series Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward-looking signals, EA Series showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Ethereum and EA Series

The main advantage of trading using opposite IShares Ethereum and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Ethereum 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 iShares Ethereum Trust 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.