Correlation Between MicroSectors FANG and EA Series
Can any of the company-specific risk be diversified away by investing in both MicroSectors FANG 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 MicroSectors FANG and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroSectors FANG Index and EA Series Trust, you can compare the effects of market volatilities on MicroSectors FANG 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 MicroSectors FANG with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors FANG and EA Series.
Diversification Opportunities for MicroSectors FANG and EA Series
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MicroSectors and BUXX is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors FANG Index 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 MicroSectors FANG 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 MicroSectors FANG Index 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 MicroSectors FANG i.e., MicroSectors FANG and EA Series go up and down completely randomly.
Pair Corralation between MicroSectors FANG and EA Series
Given the investment horizon of 90 days MicroSectors FANG Index is expected to generate 65.01 times more return on investment than EA Series. However, MicroSectors FANG is 65.01 times more volatile than EA Series Trust. It trades about 0.05 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.15 per unit of risk. If you would invest 41,800 in MicroSectors FANG Index on March 12, 2025 and sell it today you would earn a total of 1,590 from holding MicroSectors FANG Index or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 79.37% |
| Values | Daily Returns |
MicroSectors FANG Index vs. EA Series Trust
Performance |
| Timeline |
| MicroSectors FANG Index |
Risk-Adjusted Performance
Insignificant
Weak | Strong |
| EA Series Trust |
MicroSectors FANG and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors FANG and EA Series
The main advantage of trading using opposite MicroSectors FANG and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors FANG 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.| MicroSectors FANG vs. Direxion Daily Semiconductor | MicroSectors FANG vs. MicroSectors Solactive FANG | MicroSectors FANG vs. MicroSectors FANG Index | MicroSectors FANG vs. Direxion Daily Technology |
| EA Series vs. VanEck Vectors Moodys | EA Series vs. Valued Advisers Trust | EA Series vs. Xtrackers California Municipal | EA Series vs. Principal Exchange Traded Funds |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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