Correlation Between SPDR Dow and Avantis Real
Can any of the company-specific risk be diversified away by investing in both SPDR Dow 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 SPDR Dow and Avantis Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Dow Jones and Avantis Real Estate, you can compare the effects of market volatilities on SPDR Dow 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 SPDR Dow with a short position of Avantis Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and Avantis Real.
Diversification Opportunities for SPDR Dow and Avantis Real
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and Avantis is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones 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 SPDR Dow 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 Dow Jones 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 SPDR Dow i.e., SPDR Dow and Avantis Real go up and down completely randomly.
Pair Corralation between SPDR Dow and Avantis Real
Considering the 90-day investment horizon SPDR Dow Jones is expected to generate 0.93 times more return on investment than Avantis Real. However, SPDR Dow Jones is 1.08 times less risky than Avantis Real. It trades about 0.01 of its potential returns per unit of risk. Avantis Real Estate is currently generating about -0.01 per unit of risk. If you would invest 4,620 in SPDR Dow Jones on August 27, 2024 and sell it today you would earn a total of 6.00 from holding SPDR Dow Jones or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Dow Jones vs. Avantis Real Estate
Performance |
| Timeline |
| SPDR Dow Jones |
| Avantis Real Estate |
SPDR Dow and Avantis Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and Avantis Real
The main advantage of trading using opposite SPDR Dow and Avantis Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow 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.| SPDR Dow vs. SPDR Dow Jones | SPDR Dow vs. iShares International Developed | SPDR Dow vs. SPDR Dow Jones | SPDR Dow vs. SPDR SP 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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