Correlation Between Avantis Us and California Intermediate
Can any of the company-specific risk be diversified away by investing in both Avantis Us and California Intermediate 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 California Intermediate 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 California Intermediate Term Tax Free, you can compare the effects of market volatilities on Avantis Us and California Intermediate 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 California Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Us and California Intermediate.
Diversification Opportunities for Avantis Us and California Intermediate
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avantis and California is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Large Cap and California Intermediate Term T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Intermediate 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 California Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Intermediate has no effect on the direction of Avantis Us i.e., Avantis Us and California Intermediate go up and down completely randomly.
Pair Corralation between Avantis Us and California Intermediate
Assuming the 90 days horizon Avantis Large Cap is expected to generate 4.97 times more return on investment than California Intermediate. However, Avantis Us is 4.97 times more volatile than California Intermediate Term Tax Free. It trades about 0.07 of its potential returns per unit of risk. California Intermediate Term Tax Free is currently generating about 0.02 per unit of risk. If you would invest 1,081 in Avantis Large Cap on October 11, 2024 and sell it today you would earn a total of 354.00 from holding Avantis Large Cap or generate 32.75% 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. California Intermediate Term T
Performance |
| Timeline |
| Avantis Large Cap |
| California Intermediate |
Avantis Us and California Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Us and California Intermediate
The main advantage of trading using opposite Avantis Us and California Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Us position performs unexpectedly, California Intermediate 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 California Intermediate will offset losses from the drop in California Intermediate's long position.| Avantis Us vs. Fidelity Flex Servative | Avantis Us vs. Leader Short Term Bond | Avantis Us vs. Nuveen Short Term | Avantis Us vs. Chartwell Short Duration |
| California Intermediate vs. Avantis Large Cap | California Intermediate vs. Dodge Cox Stock | California Intermediate vs. Fundamental Large Cap | California Intermediate vs. Profunds Large Cap Growth |
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.
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