Correlation Between Virtus ETF and Avantis Small
Can any of the company-specific risk be diversified away by investing in both Virtus ETF and Avantis Small 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 Virtus ETF and Avantis Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus ETF Trust and Avantis Small Cap, you can compare the effects of market volatilities on Virtus ETF and Avantis Small 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 Virtus ETF with a short position of Avantis Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus ETF and Avantis Small.
Diversification Opportunities for Virtus ETF and Avantis Small
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Avantis is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Virtus ETF Trust and Avantis Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Small Cap and Virtus ETF 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 Virtus ETF Trust are associated (or correlated) with Avantis Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Small Cap has no effect on the direction of Virtus ETF i.e., Virtus ETF and Avantis Small go up and down completely randomly.
Pair Corralation between Virtus ETF and Avantis Small
Given the investment horizon of 90 days Virtus ETF Trust is expected to generate 0.9 times more return on investment than Avantis Small. However, Virtus ETF Trust is 1.11 times less risky than Avantis Small. It trades about 0.06 of its potential returns per unit of risk. Avantis Small Cap is currently generating about 0.02 per unit of risk. If you would invest 3,972 in Virtus ETF Trust on September 13, 2024 and sell it today you would earn a total of 36.00 from holding Virtus ETF Trust or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus ETF Trust vs. Avantis Small Cap
Performance |
| Timeline |
| Virtus ETF Trust |
| Avantis Small Cap |
Virtus ETF and Avantis Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus ETF and Avantis Small
The main advantage of trading using opposite Virtus ETF and Avantis Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus ETF position performs unexpectedly, Avantis Small 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 Small will offset losses from the drop in Avantis Small's long position.| Virtus ETF vs. iShares Small Cap | Virtus ETF vs. Pacer Cash Cows | Virtus ETF vs. GXO Logistics | Virtus ETF vs. ProShares Pet Care |
| Avantis Small vs. American Sierra Gold | Avantis Small vs. American Century ETF | Avantis Small vs. Avantis Emerging Markets | Avantis Small 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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