Correlation Between Avantis Equity and IShares Global
Can any of the company-specific risk be diversified away by investing in both Avantis Equity and IShares Global 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 Equity and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Equity ETF and iShares Global REIT, you can compare the effects of market volatilities on Avantis Equity and IShares Global 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 Equity with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Equity and IShares Global.
Diversification Opportunities for Avantis Equity and IShares Global
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Avantis and IShares is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Equity ETF and iShares Global REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global REIT and Avantis Equity 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 Equity ETF are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global REIT has no effect on the direction of Avantis Equity i.e., Avantis Equity and IShares Global go up and down completely randomly.
Pair Corralation between Avantis Equity and IShares Global
Given the investment horizon of 90 days Avantis Equity ETF is expected to generate 0.83 times more return on investment than IShares Global. However, Avantis Equity ETF is 1.21 times less risky than IShares Global. It trades about 0.11 of its potential returns per unit of risk. iShares Global REIT is currently generating about 0.04 per unit of risk. If you would invest 6,597 in Avantis Equity ETF on September 12, 2024 and sell it today you would earn a total of 3,534 from holding Avantis Equity ETF or generate 53.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Equity ETF vs. iShares Global REIT
Performance |
| Timeline |
| Avantis Equity ETF |
| iShares Global REIT |
Avantis Equity and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Equity and IShares Global
The main advantage of trading using opposite Avantis Equity and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Equity position performs unexpectedly, IShares Global 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 IShares Global will offset losses from the drop in IShares Global's long position.| Avantis Equity vs. Avantis International Equity | Avantis Equity vs. Avantis Emerging Markets | Avantis Equity vs. Avantis Small Cap | Avantis Equity vs. Avantis International Small |
| IShares Global vs. Avantis Emerging Markets | IShares Global vs. American Century ETF | IShares Global vs. Avantis Emerging Markets | IShares Global 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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