Correlation Between Avantis Us and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Avantis Us and Federated Emerging 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 Federated Emerging 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 Federated Emerging Market, you can compare the effects of market volatilities on Avantis Us and Federated Emerging 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 Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Us and Federated Emerging.
Diversification Opportunities for Avantis Us and Federated Emerging
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avantis and Federated is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Large Cap and Federated Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Emerging Market 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 Federated Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Emerging Market has no effect on the direction of Avantis Us i.e., Avantis Us and Federated Emerging go up and down completely randomly.
Pair Corralation between Avantis Us and Federated Emerging
Assuming the 90 days horizon Avantis Large Cap is expected to generate 2.2 times more return on investment than Federated Emerging. However, Avantis Us is 2.2 times more volatile than Federated Emerging Market. It trades about 0.34 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.27 per unit of risk. If you would invest 1,418 in Avantis Large Cap on November 3, 2024 and sell it today you would earn a total of 62.00 from holding Avantis Large Cap or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Large Cap vs. Federated Emerging Market
Performance |
| Timeline |
| Avantis Large Cap |
| Federated Emerging Market |
Avantis Us and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Us and Federated Emerging
The main advantage of trading using opposite Avantis Us and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Us position performs unexpectedly, Federated Emerging 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 Federated Emerging will offset losses from the drop in Federated Emerging'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 |
| Federated Emerging vs. Qs Large Cap | Federated Emerging vs. Fisher Large Cap | Federated Emerging vs. Virtus Nfj Large Cap | Federated Emerging vs. Smead Value Fund |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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