Correlation Between Avantis International and American Century
Can any of the company-specific risk be diversified away by investing in both Avantis International and American Century 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 International and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis International Equity and American Century ETF, you can compare the effects of market volatilities on Avantis International and American Century 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 International with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis International and American Century.
Diversification Opportunities for Avantis International and American Century
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avantis and American is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Avantis International Equity and American Century ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century ETF and Avantis International 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 International Equity are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century ETF has no effect on the direction of Avantis International i.e., Avantis International and American Century go up and down completely randomly.
Pair Corralation between Avantis International and American Century
Given the investment horizon of 90 days Avantis International Equity is expected to under-perform the American Century. But the etf apears to be less risky and, when comparing its historical volatility, Avantis International Equity is 1.32 times less risky than American Century. The etf trades about -0.12 of its potential returns per unit of risk. The American Century ETF is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 6,677 in American Century ETF on August 28, 2024 and sell it today you would earn a total of 433.00 from holding American Century ETF or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis International Equity vs. American Century ETF
Performance |
| Timeline |
| Avantis International |
| American Century ETF |
Avantis International and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis International and American Century
The main advantage of trading using opposite Avantis International and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis International position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Avantis International vs. Avantis Emerging Markets | Avantis International vs. Avantis Equity ETF | Avantis International vs. Avantis International Small | Avantis International vs. Avantis Small Cap |
| American Century vs. BlackRock ETF Trust | American Century vs. Rbb Fund | American Century vs. Virtus ETF Trust | American Century vs. Amplify CWP Enhanced |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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