Correlation Between SPDR MarketAxess and Avantis Core
Can any of the company-specific risk be diversified away by investing in both SPDR MarketAxess 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 SPDR MarketAxess and Avantis Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MarketAxess Investment and Avantis Core Municipal, you can compare the effects of market volatilities on SPDR MarketAxess 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 SPDR MarketAxess with a short position of Avantis Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MarketAxess and Avantis Core.
Diversification Opportunities for SPDR MarketAxess and Avantis Core
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Avantis is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MarketAxess Investment and Avantis Core Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Core Municipal and SPDR MarketAxess 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 MarketAxess Investment 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 Municipal has no effect on the direction of SPDR MarketAxess i.e., SPDR MarketAxess and Avantis Core go up and down completely randomly.
Pair Corralation between SPDR MarketAxess and Avantis Core
Given the investment horizon of 90 days SPDR MarketAxess Investment is expected to generate 2.06 times more return on investment than Avantis Core. However, SPDR MarketAxess is 2.06 times more volatile than Avantis Core Municipal. It trades about 0.04 of its potential returns per unit of risk. Avantis Core Municipal is currently generating about 0.06 per unit of risk. If you would invest 8,731 in SPDR MarketAxess Investment on August 27, 2024 and sell it today you would earn a total of 775.00 from holding SPDR MarketAxess Investment or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR MarketAxess Investment vs. Avantis Core Municipal
Performance |
| Timeline |
| SPDR MarketAxess Inv |
| Avantis Core Municipal |
SPDR MarketAxess and Avantis Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MarketAxess and Avantis Core
The main advantage of trading using opposite SPDR MarketAxess and Avantis Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MarketAxess 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.| SPDR MarketAxess vs. SSGA Active Trust | SPDR MarketAxess vs. SPDR Bloomberg Barclays | SPDR MarketAxess vs. SSGA Active Trust | SPDR MarketAxess vs. SSGA Active Trust |
| Avantis Core vs. Avantis Core Fixed | Avantis Core vs. American Century ETF | Avantis Core vs. American Century Diversified | Avantis Core vs. IQ MacKay Municipal |
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 CEOs Directory module to screen CEOs from public companies around the world.
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