Correlation Between IShares International and Avantis Real
Can any of the company-specific risk be diversified away by investing in both IShares International and Avantis Real 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 International and Avantis Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares International Developed and Avantis Real Estate, you can compare the effects of market volatilities on IShares International and Avantis Real 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 International with a short position of Avantis Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares International and Avantis Real.
Diversification Opportunities for IShares International and Avantis Real
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Avantis is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding iShares International Develope and Avantis Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Real Estate and IShares International 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 International Developed are associated (or correlated) with Avantis Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Real Estate has no effect on the direction of IShares International i.e., IShares International and Avantis Real go up and down completely randomly.
Pair Corralation between IShares International and Avantis Real
Given the investment horizon of 90 days iShares International Developed is expected to under-perform the Avantis Real. But the etf apears to be less risky and, when comparing its historical volatility, iShares International Developed is 1.11 times less risky than Avantis Real. The etf trades about -0.22 of its potential returns per unit of risk. The Avantis Real Estate is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,569 in Avantis Real Estate on August 27, 2024 and sell it today you would lose (13.00) from holding Avantis Real Estate or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares International Develope vs. Avantis Real Estate
Performance |
| Timeline |
| iShares International |
| Avantis Real Estate |
IShares International and Avantis Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares International and Avantis Real
The main advantage of trading using opposite IShares International and Avantis Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares International position performs unexpectedly, Avantis Real 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 Real will offset losses from the drop in Avantis Real's long position.| IShares International vs. iShares International Treasury | IShares International vs. iShares 1 3 Year | IShares International vs. iShares MSCI Emerging |
| Avantis Real vs. Avantis Emerging Markets | Avantis Real vs. American Century ETF | Avantis Real vs. Avantis Emerging Markets | Avantis Real 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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