Correlation Between IShares Trust and Avantis Core
Can any of the company-specific risk be diversified away by investing in both IShares Trust 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 IShares Trust and Avantis Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and Avantis Core Fixed, you can compare the effects of market volatilities on IShares Trust 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 IShares Trust with a short position of Avantis Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Avantis Core.
Diversification Opportunities for IShares Trust and Avantis Core
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Avantis is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust 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 IShares Trust 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 iShares Trust 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 IShares Trust i.e., IShares Trust and Avantis Core go up and down completely randomly.
Pair Corralation between IShares Trust and Avantis Core
Given the investment horizon of 90 days iShares Trust is expected to generate 3.02 times more return on investment than Avantis Core. However, IShares Trust is 3.02 times more volatile than Avantis Core Fixed. It trades about 0.05 of its potential returns per unit of risk. Avantis Core Fixed is currently generating about 0.05 per unit of risk. If you would invest 6,703 in iShares Trust on August 31, 2024 and sell it today you would earn a total of 1,492 from holding iShares Trust or generate 22.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
iShares Trust vs. Avantis Core Fixed
Performance |
| Timeline |
| iShares Trust |
| Avantis Core Fixed |
IShares Trust and Avantis Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and Avantis Core
The main advantage of trading using opposite IShares Trust and Avantis Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust 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.| IShares Trust vs. Nexalin Technology | IShares Trust vs. Kilroy Realty Corp | IShares Trust vs. Highwoods Properties | IShares Trust vs. Karat Packaging |
| Avantis Core vs. American Century ETF | Avantis Core vs. Avantis Core Municipal | Avantis Core vs. Avantis International Equity | Avantis Core vs. Avantis Emerging Markets |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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