Correlation Between Avantis Emerging and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both Avantis Emerging and SPDR SSGA 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 SPDR SSGA 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 SPDR SSGA Small, you can compare the effects of market volatilities on Avantis Emerging and SPDR SSGA 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 SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Emerging and SPDR SSGA.
Diversification Opportunities for Avantis Emerging and SPDR SSGA
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Avantis and SPDR is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Emerging Markets and SPDR SSGA Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Small 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 SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA Small has no effect on the direction of Avantis Emerging i.e., Avantis Emerging and SPDR SSGA go up and down completely randomly.
Pair Corralation between Avantis Emerging and SPDR SSGA
Given the investment horizon of 90 days Avantis Emerging Markets is expected to under-perform the SPDR SSGA. But the etf apears to be less risky and, when comparing its historical volatility, Avantis Emerging Markets is 1.86 times less risky than SPDR SSGA. The etf trades about -0.1 of its potential returns per unit of risk. The SPDR SSGA Small is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 12,507 in SPDR SSGA Small on September 13, 2024 and sell it today you would earn a total of 1,151 from holding SPDR SSGA Small or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Emerging Markets vs. SPDR SSGA Small
Performance |
| Timeline |
| Avantis Emerging Markets |
| SPDR SSGA Small |
Avantis Emerging and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Emerging and SPDR SSGA
The main advantage of trading using opposite Avantis Emerging and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Emerging position performs unexpectedly, SPDR SSGA 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 SPDR SSGA will offset losses from the drop in SPDR SSGA's 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 |
| SPDR SSGA vs. SPDR SSGA Large | SPDR SSGA vs. Invesco SP SmallCap | SPDR SSGA vs. Invesco SP MidCap | SPDR SSGA vs. SPDR MSCI EAFE |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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