Correlation Between Global X and Avantis Core
Can any of the company-specific risk be diversified away by investing in both Global X and Avantis Core 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 Global X and Avantis Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Cybersecurity and Avantis Core Fixed, you can compare the effects of market volatilities on Global X and Avantis Core 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 Global X with a short position of Avantis Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Avantis Core.
Diversification Opportunities for Global X and Avantis Core
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Avantis is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Global X Cybersecurity and Avantis Core Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Core Fixed and Global X 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 Global X Cybersecurity are associated (or correlated) with Avantis Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Core Fixed has no effect on the direction of Global X i.e., Global X and Avantis Core go up and down completely randomly.
Pair Corralation between Global X and Avantis Core
Considering the 90-day investment horizon Global X Cybersecurity is expected to generate 3.23 times more return on investment than Avantis Core. However, Global X is 3.23 times more volatile than Avantis Core Fixed. It trades about 0.25 of its potential returns per unit of risk. Avantis Core Fixed is currently generating about 0.08 per unit of risk. If you would invest 3,122 in Global X Cybersecurity on August 28, 2024 and sell it today you would earn a total of 216.00 from holding Global X Cybersecurity or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Global X Cybersecurity vs. Avantis Core Fixed
Performance |
| Timeline |
| Global X Cybersecurity |
| Avantis Core Fixed |
Global X and Avantis Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Avantis Core
The main advantage of trading using opposite Global X and Avantis Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Avantis Core 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 Avantis Core will offset losses from the drop in Avantis Core's long position.| Global X vs. Invesco DWA Utilities | Global X vs. Invesco Dynamic Large | Global X vs. Invesco Dynamic Large | Global X vs. HUMANA INC |
| Avantis Core vs. iShares MSCI EAFE | Avantis Core vs. iShares iBoxx Investment | Avantis Core vs. iShares TIPS Bond | Avantis Core vs. iShares 1 3 Year |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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