Correlation Between Avantis Us and Tax-exempt Bond
Can any of the company-specific risk be diversified away by investing in both Avantis Us and Tax-exempt Bond 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 Tax-exempt Bond 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 Tax Exempt Bond Fund, you can compare the effects of market volatilities on Avantis Us and Tax-exempt Bond 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 Tax-exempt Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Us and Tax-exempt Bond.
Diversification Opportunities for Avantis Us and Tax-exempt Bond
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avantis and Tax-exempt is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Large Cap and Tax Exempt Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Exempt Bond 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 Tax-exempt Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Exempt Bond has no effect on the direction of Avantis Us i.e., Avantis Us and Tax-exempt Bond go up and down completely randomly.
Pair Corralation between Avantis Us and Tax-exempt Bond
Assuming the 90 days horizon Avantis Large Cap is expected to generate 3.72 times more return on investment than Tax-exempt Bond. However, Avantis Us is 3.72 times more volatile than Tax Exempt Bond Fund. It trades about 0.22 of its potential returns per unit of risk. Tax Exempt Bond Fund is currently generating about 0.03 per unit of risk. If you would invest 1,373 in Avantis Large Cap on September 3, 2024 and sell it today you would earn a total of 164.00 from holding Avantis Large Cap or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Large Cap vs. Tax Exempt Bond Fund
Performance |
| Timeline |
| Avantis Large Cap |
| Tax Exempt Bond |
Avantis Us and Tax-exempt Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Us and Tax-exempt Bond
The main advantage of trading using opposite Avantis Us and Tax-exempt Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Us position performs unexpectedly, Tax-exempt Bond 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 Tax-exempt Bond will offset losses from the drop in Tax-exempt Bond's long position.| Avantis Us vs. Aqr Long Short Equity | Avantis Us vs. Rbc Short Duration | Avantis Us vs. Goldman Sachs Short | Avantis Us vs. Ab Select Longshort |
| Tax-exempt Bond vs. Jhancock Disciplined Value | Tax-exempt Bond vs. Americafirst Large Cap | Tax-exempt Bond vs. Siit Large Cap | Tax-exempt Bond vs. Avantis Large Cap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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