Correlation Between EA Series and Vanguard Small

Can any of the company-specific risk be diversified away by investing in both EA Series and Vanguard Small 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 Vanguard Small 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 Vanguard Small Cap Growth, you can compare the effects of market volatilities on EA Series and Vanguard Small 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 Vanguard Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Vanguard Small.

Diversification Opportunities for EA Series and Vanguard Small

0.3

Correlation Coefficient

EA Series  Vanguard Small

Weak diversification

The 3 months correlation between BESF and Vanguard is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Vanguard Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap 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 Vanguard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of EA Series i.e., EA Series and Vanguard Small go up and down completely randomly.

Pair Corralation between EA Series and Vanguard Small

Given the investment horizon of 90 days EA Series Trust is expected to generate 1.18 times more return on investment than Vanguard Small. However, EA Series is 1.18 times more volatile than Vanguard Small Cap Growth. It trades about 0.11 of its potential returns per unit of risk. Vanguard Small Cap Growth is currently generating about 0.1 per unit of risk. If you would invest  2,525  in EA Series Trust on May 20, 2025 and sell it today you would earn a total of  172.00  from holding EA Series Trust or generate 6.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	83.87%
Values	Daily Returns

EA Series Trust  vs.  Vanguard Small Cap Growth

EA Series Trust

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, EA Series may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Vanguard Small Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Small Cap Growth are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental drivers, Vanguard Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with EA Series and Vanguard Small

The main advantage of trading using opposite EA Series and Vanguard Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Vanguard Small 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 Vanguard Small will offset losses from the drop in Vanguard Small's long position.

The idea behind EA Series Trust and Vanguard Small Cap Growth 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.