Correlation Between Avantis International and Avantis All

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Can any of the company-specific risk be diversified away by investing in both Avantis International and Avantis All 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 Avantis International and Avantis All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis International Small and Avantis All Equity, you can compare the effects of market volatilities on Avantis International and Avantis All 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 Avantis International with a short position of Avantis All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis International and Avantis All.

Diversification Opportunities for Avantis International and Avantis All

-0.08
  Correlation Coefficient

Good diversification

The 3 months correlation between Avantis and Avantis is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Avantis International Small and Avantis All Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis All Equity and Avantis 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 Avantis International Small are associated (or correlated) with Avantis All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis All Equity has no effect on the direction of Avantis International i.e., Avantis International and Avantis All go up and down completely randomly.

Pair Corralation between Avantis International and Avantis All

Given the investment horizon of 90 days Avantis International is expected to generate 39.35 times less return on investment than Avantis All. In addition to that, Avantis International is 1.19 times more volatile than Avantis All Equity. It trades about 0.0 of its total potential returns per unit of risk. Avantis All Equity is currently generating about 0.18 per unit of volatility. If you would invest  7,092  in Avantis All Equity on September 2, 2024 and sell it today you would earn a total of  564.00  from holding Avantis All Equity or generate 7.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Avantis International Small  vs.  Avantis All Equity

 Performance 
       Timeline  
Avantis International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Avantis International Small has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Avantis International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Avantis All Equity 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Avantis All Equity are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Avantis All may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Avantis International and Avantis All Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Avantis International and Avantis All

The main advantage of trading using opposite Avantis International and Avantis All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis International position performs unexpectedly, Avantis All 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 All will offset losses from the drop in Avantis All's long position.
The idea behind Avantis International Small and Avantis All Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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