Correlation Between Dfa Real and Acrex
Can any of the company-specific risk be diversified away by investing in both Dfa Real and Acrex 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 Real and Acrex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa Real Estate and Acrex, you can compare the effects of market volatilities on Dfa Real and Acrex 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 Real with a short position of Acrex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa Real and Acrex.
Diversification Opportunities for Dfa Real and Acrex
Poor diversification
The 3 months correlation between Dfa and Acrex is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dfa Real Estate and Acrex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acrex and Dfa Real 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 Real Estate are associated (or correlated) with Acrex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acrex has no effect on the direction of Dfa Real i.e., Dfa Real and Acrex go up and down completely randomly.
Pair Corralation between Dfa Real and Acrex
Assuming the 90 days horizon Dfa Real Estate is expected to under-perform the Acrex. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dfa Real Estate is 1.33 times less risky than Acrex. The mutual fund trades about -0.4 of its potential returns per unit of risk. The Acrex is currently generating about -0.29 of returns per unit of risk over similar time horizon. If you would invest 1,227 in Acrex on September 28, 2024 and sell it today you would lose (115.00) from holding Acrex or give up 9.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dfa Real Estate vs. Acrex
Performance |
| Timeline |
| Dfa Real Estate |
| Acrex |
Dfa Real and Acrex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dfa Real and Acrex
The main advantage of trading using opposite Dfa Real and Acrex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa Real position performs unexpectedly, Acrex 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 Acrex will offset losses from the drop in Acrex's long position.| Dfa Real vs. Dfa International Small | Dfa Real vs. Us Large Cap | Dfa Real vs. International Small Pany | Dfa Real vs. Dfa International Value |
| Acrex vs. Lord Abbett Small | Acrex vs. Fidelity Small Cap | Acrex vs. Applied Finance Explorer | Acrex vs. Heartland Value Plus |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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