Correlation Between Avantis Us and Avantis International

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

Diversification Opportunities for Avantis Us and Avantis International

AvantisAvantisDiversified AwayAvantisAvantisDiversified Away100%
0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Avantis and Avantis is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Equity and Avantis International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis International and Avantis Us 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 Equity are associated (or correlated) with Avantis International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis International has no effect on the direction of Avantis Us i.e., Avantis Us and Avantis International go up and down completely randomly.

Pair Corralation between Avantis Us and Avantis International

Assuming the 90 days horizon Avantis Us is expected to generate 4.12 times less return on investment than Avantis International. In addition to that, Avantis Us is 1.05 times more volatile than Avantis International Small. It trades about 0.03 of its total potential returns per unit of risk. Avantis International Small is currently generating about 0.13 per unit of volatility. If you would invest  1,227  in Avantis International Small on November 22, 2024 and sell it today you would earn a total of  72.00  from holding Avantis International Small or generate 5.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Avantis Equity  vs.  Avantis International Small

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -6-4-202
JavaScript chart by amCharts 3.21.15AVUSX AVANX
       Timeline  
Avantis Equity 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Avantis Equity are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Avantis Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb18.418.618.81919.219.4
Avantis International 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Avantis International Small are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Avantis International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1212.212.412.612.813

Avantis Us and Avantis International Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.39-1.79-1.19-0.590.00.591.211.822.433.04 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15AVUSX AVANX
       Returns  

Pair Trading with Avantis Us and Avantis International

The main advantage of trading using opposite Avantis Us and Avantis International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Us position performs unexpectedly, Avantis International 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 International will offset losses from the drop in Avantis International's long position.
The idea behind Avantis Equity and Avantis International Small 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.
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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