Correlation Between Avantis Real and Xtrackers International
Can any of the company-specific risk be diversified away by investing in both Avantis Real and Xtrackers International 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 Real and Xtrackers International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Real Estate and Xtrackers International Real, you can compare the effects of market volatilities on Avantis Real and Xtrackers International 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 Real with a short position of Xtrackers International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Real and Xtrackers International.
Diversification Opportunities for Avantis Real and Xtrackers International
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Avantis and Xtrackers is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Real Estate and Xtrackers International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers International and Avantis Real 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 Real Estate are associated (or correlated) with Xtrackers International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers International has no effect on the direction of Avantis Real i.e., Avantis Real and Xtrackers International go up and down completely randomly.
Pair Corralation between Avantis Real and Xtrackers International
Given the investment horizon of 90 days Avantis Real Estate is expected to under-perform the Xtrackers International. In addition to that, Avantis Real is 1.17 times more volatile than Xtrackers International Real. It trades about -0.03 of its total potential returns per unit of risk. Xtrackers International Real is currently generating about 0.0 per unit of volatility. If you would invest 2,051 in Xtrackers International Real on November 18, 2024 and sell it today you would earn a total of 1.00 from holding Xtrackers International Real or generate 0.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Real Estate vs. Xtrackers International Real
Performance |
| Timeline |
| Avantis Real Estate |
| Xtrackers International |
Avantis Real and Xtrackers International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Real and Xtrackers International
The main advantage of trading using opposite Avantis Real and Xtrackers International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Real position performs unexpectedly, Xtrackers International 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 Xtrackers International will offset losses from the drop in Xtrackers International's long position.| Avantis Real vs. Avantis Emerging Markets | Avantis Real vs. American Century ETF | Avantis Real vs. Avantis Emerging Markets | Avantis Real vs. Avantis Equity ETF |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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