Correlation Between Dfa Targeted and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Dfa Targeted and Emerging Markets 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 Targeted and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa Targeted Credit and Emerging Markets Small, you can compare the effects of market volatilities on Dfa Targeted and Emerging Markets 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 Targeted with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa Targeted and Emerging Markets.
Diversification Opportunities for Dfa Targeted and Emerging Markets
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dfa and Emerging is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dfa Targeted Credit and Emerging Markets Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Small and Dfa Targeted 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 Targeted Credit are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Small has no effect on the direction of Dfa Targeted i.e., Dfa Targeted and Emerging Markets go up and down completely randomly.
Pair Corralation between Dfa Targeted and Emerging Markets
Assuming the 90 days horizon Dfa Targeted Credit is expected to generate 0.06 times more return on investment than Emerging Markets. However, Dfa Targeted Credit is 17.35 times less risky than Emerging Markets. It trades about 0.5 of its potential returns per unit of risk. Emerging Markets Small is currently generating about -0.15 per unit of risk. If you would invest 951.00 in Dfa Targeted Credit on October 20, 2024 and sell it today you would earn a total of 4.00 from holding Dfa Targeted Credit or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dfa Targeted Credit vs. Emerging Markets Small
Performance |
| Timeline |
| Dfa Targeted Credit |
| Emerging Markets Small |
Dfa Targeted and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dfa Targeted and Emerging Markets
The main advantage of trading using opposite Dfa Targeted and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa Targeted position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Dfa Targeted vs. Intal High Relative | Dfa Targeted vs. Dfa International | Dfa Targeted vs. Dfa Inflation Protected | Dfa Targeted vs. Dfa International Small |
| Emerging Markets vs. Elfun Government Money | Emerging Markets vs. Schwab Government Money | Emerging Markets vs. Short Term Government Fund | Emerging Markets vs. Dreyfus Government Cash |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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