Correlation Between Avantis Emerging and ProShares
Can any of the company-specific risk be diversified away by investing in both Avantis Emerging and ProShares 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 Emerging and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Emerging Markets and ProShares SP MidCap, you can compare the effects of market volatilities on Avantis Emerging and ProShares 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 Emerging with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Emerging and ProShares.
Diversification Opportunities for Avantis Emerging and ProShares
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avantis and ProShares is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Emerging Markets and ProShares SP MidCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP MidCap and Avantis Emerging 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 Emerging Markets are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP MidCap has no effect on the direction of Avantis Emerging i.e., Avantis Emerging and ProShares go up and down completely randomly.
Pair Corralation between Avantis Emerging and ProShares
Given the investment horizon of 90 days Avantis Emerging Markets is expected to under-perform the ProShares. But the etf apears to be less risky and, when comparing its historical volatility, Avantis Emerging Markets is 1.03 times less risky than ProShares. The etf trades about -0.1 of its potential returns per unit of risk. The ProShares SP MidCap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,243 in ProShares SP MidCap on September 13, 2024 and sell it today you would earn a total of 324.00 from holding ProShares SP MidCap or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Emerging Markets vs. ProShares SP MidCap
Performance |
| Timeline |
| Avantis Emerging Markets |
| ProShares SP MidCap |
Avantis Emerging and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Emerging and ProShares
The main advantage of trading using opposite Avantis Emerging and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Emerging position performs unexpectedly, ProShares 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 ProShares will offset losses from the drop in ProShares' long position.| Avantis Emerging vs. Avantis International Small | Avantis Emerging vs. Avantis Small Cap | Avantis Emerging vs. Avantis Emerging Markets | Avantis Emerging vs. American Century ETF |
| ProShares vs. American Sierra Gold | ProShares vs. American Century ETF | ProShares vs. Avantis Emerging Markets | ProShares vs. Avantis Emerging Markets |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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