Correlation Between Avantis Small and ProShares
Can any of the company-specific risk be diversified away by investing in both Avantis Small 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 Small and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Small Cap and ProShares SP MidCap, you can compare the effects of market volatilities on Avantis Small 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 Small with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Small and ProShares.
Diversification Opportunities for Avantis Small and ProShares
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Avantis and ProShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Small Cap 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 Small 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 Small Cap 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 Small i.e., Avantis Small and ProShares go up and down completely randomly.
Pair Corralation between Avantis Small and ProShares
Given the investment horizon of 90 days Avantis Small is expected to generate 1.1 times less return on investment than ProShares. In addition to that, Avantis Small is 1.45 times more volatile than ProShares SP MidCap. It trades about 0.05 of its total potential returns per unit of risk. ProShares SP MidCap is currently generating about 0.08 per unit of volatility. If you would invest 7,322 in ProShares SP MidCap on October 25, 2024 and sell it today you would earn a total of 919.00 from holding ProShares SP MidCap or generate 12.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Small Cap vs. ProShares SP MidCap
Performance |
| Timeline |
| Avantis Small Cap |
| ProShares SP MidCap |
Avantis Small and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Small and ProShares
The main advantage of trading using opposite Avantis Small and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Small 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 Small vs. Dimensional ETF Trust | Avantis Small vs. Vanguard Small Cap Index | Avantis Small vs. First Trust Multi Manager | Avantis Small vs. Vanguard SP Small Cap |
| ProShares vs. ProShares Russell 2000 | ProShares vs. ProShares MSCI EAFE | ProShares vs. ProShares MSCI Emerging | ProShares vs. ProShares MSCI Europe |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges |