Correlation Between SPDR Bloomberg and EA Series

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

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

Diversification Opportunities for SPDR Bloomberg and EA Series

0.97

Correlation Coefficient

SPDR Bloomberg  EA Series

Almost no diversification

The 3 months correlation between SPDR and BUXX is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Investment 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 SPDR Bloomberg 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 SPDR Bloomberg Investment 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 SPDR Bloomberg i.e., SPDR Bloomberg and EA Series go up and down completely randomly.

Pair Corralation between SPDR Bloomberg and EA Series

Given the investment horizon of 90 days SPDR Bloomberg is expected to generate 1.03 times less return on investment than EA Series. But when comparing it to its historical volatility, SPDR Bloomberg Investment is 1.63 times less risky than EA Series. It trades about 0.46 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1,867  in EA Series Trust on September 12, 2024 and sell it today you would earn a total of  165.00  from holding EA Series Trust or generate 8.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.74%
Values	Daily Returns

SPDR Bloomberg Investment  vs.  EA Series Trust

SPDR Bloomberg Investment

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg Investment are ranked lower than 32 (%) 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.

EA Series Trust

Risk-Adjusted Performance

18 of 100

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR Bloomberg and EA Series

The main advantage of trading using opposite SPDR Bloomberg and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg 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 SPDR Bloomberg Investment 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.

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.