Correlation Between Fm Investments and Avantis Emerging

Can any of the company-specific risk be diversified away by investing in both Fm Investments and Avantis Emerging 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 Fm Investments and Avantis Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fm Investments Large and Avantis Emerging Markets, you can compare the effects of market volatilities on Fm Investments and Avantis Emerging 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 Fm Investments with a short position of Avantis Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fm Investments and Avantis Emerging.

Diversification Opportunities for Fm Investments and Avantis Emerging

-0.22

Correlation Coefficient

Fm Investments  Avantis Emerging

Very good diversification

The 3 months correlation between IAFLX and Avantis is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fm Investments Large and Avantis Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Emerging Markets and Fm Investments 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 Fm Investments Large are associated (or correlated) with Avantis Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Emerging Markets has no effect on the direction of Fm Investments i.e., Fm Investments and Avantis Emerging go up and down completely randomly.

Pair Corralation between Fm Investments and Avantis Emerging

Assuming the 90 days horizon Fm Investments Large is expected to generate 1.37 times more return on investment than Avantis Emerging. However, Fm Investments is 1.37 times more volatile than Avantis Emerging Markets. It trades about 0.11 of its potential returns per unit of risk. Avantis Emerging Markets is currently generating about 0.07 per unit of risk. If you would invest  1,334  in Fm Investments Large on September 12, 2024 and sell it today you would earn a total of  616.00  from holding Fm Investments Large or generate 46.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fm Investments Large  vs.  Avantis Emerging Markets

Fm Investments Large

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fm Investments Large are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Fm Investments may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Avantis Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avantis Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Avantis Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fm Investments and Avantis Emerging

The main advantage of trading using opposite Fm Investments and Avantis Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fm Investments position performs unexpectedly, Avantis Emerging 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 Emerging will offset losses from the drop in Avantis Emerging's long position.

The idea behind Fm Investments Large and Avantis Emerging Markets 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.