Correlation Between SPDR MSCI and Avantis International
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI and Avantis 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 SPDR MSCI and Avantis International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI Emerging and Avantis International Equity, you can compare the effects of market volatilities on SPDR MSCI and Avantis 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 SPDR MSCI with a short position of Avantis International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and Avantis International.
Diversification Opportunities for SPDR MSCI and Avantis International
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Avantis is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI Emerging and Avantis International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis International and SPDR MSCI 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 SPDR MSCI Emerging are associated (or correlated) with Avantis International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis International has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and Avantis International go up and down completely randomly.
Pair Corralation between SPDR MSCI and Avantis International
Given the investment horizon of 90 days SPDR MSCI is expected to generate 1.29 times less return on investment than Avantis International. In addition to that, SPDR MSCI is 1.19 times more volatile than Avantis International Equity. It trades about 0.04 of its total potential returns per unit of risk. Avantis International Equity is currently generating about 0.06 per unit of volatility. If you would invest 5,090 in Avantis International Equity on September 2, 2024 and sell it today you would earn a total of 1,325 from holding Avantis International Equity or generate 26.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR MSCI Emerging vs. Avantis International Equity
Performance |
| Timeline |
| SPDR MSCI Emerging |
| Avantis International |
SPDR MSCI and Avantis International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and Avantis International
The main advantage of trading using opposite SPDR MSCI and Avantis International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI position performs unexpectedly, Avantis 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 Avantis International will offset losses from the drop in Avantis International's long position.| SPDR MSCI vs. SPDR MSCI Emerging | SPDR MSCI vs. SPDR MSCI EAFE | SPDR MSCI vs. SPDR DoubleLine Emerging | SPDR MSCI vs. SPDR MSCI EAFE |
| Avantis International vs. Avantis Emerging Markets | Avantis International vs. Avantis Equity ETF | Avantis International vs. Avantis International Small | Avantis International vs. Avantis Small Cap |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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