Correlation Between Dfa International and Dfa Real
Can any of the company-specific risk be diversified away by investing in both Dfa International and Dfa Real 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 Dfa Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa International Value and Dfa Real Estate, you can compare the effects of market volatilities on Dfa International and Dfa Real 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 Dfa Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa International and Dfa Real.
Diversification Opportunities for Dfa International and Dfa Real
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dfa and DFA is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dfa International Value and Dfa Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Real Estate 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 Value are associated (or correlated) with Dfa Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Real Estate has no effect on the direction of Dfa International i.e., Dfa International and Dfa Real go up and down completely randomly.
Pair Corralation between Dfa International and Dfa Real
Assuming the 90 days horizon Dfa International Value is expected to generate 0.73 times more return on investment than Dfa Real. However, Dfa International Value is 1.36 times less risky than Dfa Real. It trades about 0.07 of its potential returns per unit of risk. Dfa Real Estate is currently generating about 0.04 per unit of risk. If you would invest 1,644 in Dfa International Value on August 24, 2024 and sell it today you would earn a total of 474.00 from holding Dfa International Value or generate 28.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dfa International Value vs. Dfa Real Estate
Performance |
| Timeline |
| Dfa International Value |
| Dfa Real Estate |
Dfa International and Dfa Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dfa International and Dfa Real
The main advantage of trading using opposite Dfa International and Dfa Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa International position performs unexpectedly, Dfa Real 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 Dfa Real will offset losses from the drop in Dfa Real's long position.| Dfa International vs. Longleaf Partners International | Dfa International vs. HUMANA INC | Dfa International vs. Aquagold International | Dfa International vs. Barloworld Ltd ADR |
| Dfa Real vs. Dfa International Small | Dfa Real vs. Us Large Cap | Dfa Real vs. International Small Pany | Dfa Real vs. Dfa International Value |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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