Correlation Between Avantis International and VictoryShares Emerging

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

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

Diversification Opportunities for Avantis International and VictoryShares Emerging

0.96

Correlation Coefficient

Avantis International  VictoryShares Emerging

Almost no diversification

The 3 months correlation between Avantis and VictoryShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Avantis International Large and VictoryShares Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares Emerging 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 Large are associated (or correlated) with VictoryShares Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares Emerging has no effect on the direction of Avantis International i.e., Avantis International and VictoryShares Emerging go up and down completely randomly.

Pair Corralation between Avantis International and VictoryShares Emerging

Given the investment horizon of 90 days Avantis International is expected to generate 1.27 times less return on investment than VictoryShares Emerging. But when comparing it to its historical volatility, Avantis International Large is 1.03 times less risky than VictoryShares Emerging. It trades about 0.16 of its potential returns per unit of risk. VictoryShares Emerging Markets is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,772  in VictoryShares Emerging Markets on May 4, 2025 and sell it today you would earn a total of  428.00  from holding VictoryShares Emerging Markets or generate 8.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Avantis International Large  vs.  VictoryShares Emerging Markets

Avantis International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Avantis International Large are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward indicators, Avantis International may actually be approaching a critical reversion point that can send shares even higher in September 2025.

VictoryShares Emerging

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares Emerging Markets are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, VictoryShares Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Avantis International and VictoryShares Emerging

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

The idea behind Avantis International Large and VictoryShares 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.