Correlation Between Avantis Us and Amana Participation
Can any of the company-specific risk be diversified away by investing in both Avantis Us and Amana Participation 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 Avantis Us and Amana Participation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Large Cap and Amana Participation Fund, you can compare the effects of market volatilities on Avantis Us and Amana Participation 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 Avantis Us with a short position of Amana Participation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Us and Amana Participation.
Diversification Opportunities for Avantis Us and Amana Participation
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avantis and Amana is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Large Cap and Amana Participation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Participation and Avantis Us 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 Avantis Large Cap are associated (or correlated) with Amana Participation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Participation has no effect on the direction of Avantis Us i.e., Avantis Us and Amana Participation go up and down completely randomly.
Pair Corralation between Avantis Us and Amana Participation
Assuming the 90 days horizon Avantis Large Cap is expected to generate 5.86 times more return on investment than Amana Participation. However, Avantis Us is 5.86 times more volatile than Amana Participation Fund. It trades about 0.07 of its potential returns per unit of risk. Amana Participation Fund is currently generating about 0.08 per unit of risk. If you would invest 1,115 in Avantis Large Cap on November 2, 2024 and sell it today you would earn a total of 382.00 from holding Avantis Large Cap or generate 34.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Large Cap vs. Amana Participation Fund
Performance |
| Timeline |
| Avantis Large Cap |
| Amana Participation |
Avantis Us and Amana Participation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Us and Amana Participation
The main advantage of trading using opposite Avantis Us and Amana Participation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Us position performs unexpectedly, Amana Participation 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 Amana Participation will offset losses from the drop in Amana Participation's long position.| Avantis Us vs. Calamos Dynamic Convertible | Avantis Us vs. Columbia Convertible Securities | Avantis Us vs. Virtus Convertible | Avantis Us vs. Fidelity Sai Convertible |
| Amana Participation vs. Barings Global Floating | Amana Participation vs. Dws Global Macro | Amana Participation vs. L Abbett Growth | Amana Participation vs. T Rowe Price |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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