Correlation Between Dfa International and James Alpha
Can any of the company-specific risk be diversified away by investing in both Dfa International and James Alpha 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 Dfa International and James Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa International Real and James Alpha Global, you can compare the effects of market volatilities on Dfa International and James Alpha 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 Dfa International with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa International and James Alpha.
Diversification Opportunities for Dfa International and James Alpha
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DFA and James is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Dfa International Real and James Alpha Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Global and Dfa 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 Dfa International Real are associated (or correlated) with James Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Alpha Global has no effect on the direction of Dfa International i.e., Dfa International and James Alpha go up and down completely randomly.
Pair Corralation between Dfa International and James Alpha
Assuming the 90 days horizon Dfa International Real is expected to under-perform the James Alpha. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dfa International Real is 1.0 times less risky than James Alpha. The mutual fund trades about -0.03 of its potential returns per unit of risk. The James Alpha Global is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,396 in James Alpha Global on September 2, 2024 and sell it today you would earn a total of 19.00 from holding James Alpha Global or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dfa International Real vs. James Alpha Global
Performance |
| Timeline |
| Dfa International Real |
| James Alpha Global |
Dfa International and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dfa International and James Alpha
The main advantage of trading using opposite Dfa International and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa International position performs unexpectedly, James Alpha 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 James Alpha will offset losses from the drop in James Alpha's long position.| Dfa International vs. Dreyfus Technology Growth | Dfa International vs. Technology Ultrasector Profund | Dfa International vs. Allianzgi Technology Fund | Dfa International vs. Hennessy Technology Fund |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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