Correlation Between SPDR Russell and Dfa Intermediate
Can any of the company-specific risk be diversified away by investing in both SPDR Russell and Dfa Intermediate 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 SPDR Russell and Dfa Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Russell 1000 and Dfa Intermediate Government, you can compare the effects of market volatilities on SPDR Russell and Dfa Intermediate 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 SPDR Russell with a short position of Dfa Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and Dfa Intermediate.
Diversification Opportunities for SPDR Russell and Dfa Intermediate
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and Dfa is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and Dfa Intermediate Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Intermediate Gov and SPDR Russell 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 SPDR Russell 1000 are associated (or correlated) with Dfa Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Intermediate Gov has no effect on the direction of SPDR Russell i.e., SPDR Russell and Dfa Intermediate go up and down completely randomly.
Pair Corralation between SPDR Russell and Dfa Intermediate
Given the investment horizon of 90 days SPDR Russell 1000 is expected to generate 2.18 times more return on investment than Dfa Intermediate. However, SPDR Russell is 2.18 times more volatile than Dfa Intermediate Government. It trades about 0.13 of its potential returns per unit of risk. Dfa Intermediate Government is currently generating about 0.08 per unit of risk. If you would invest 10,402 in SPDR Russell 1000 on September 1, 2024 and sell it today you would earn a total of 1,334 from holding SPDR Russell 1000 or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
SPDR Russell 1000 vs. Dfa Intermediate Government
Performance |
| Timeline |
| SPDR Russell 1000 |
| Dfa Intermediate Gov |
SPDR Russell and Dfa Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Russell and Dfa Intermediate
The main advantage of trading using opposite SPDR Russell and Dfa Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Russell position performs unexpectedly, Dfa Intermediate 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 Intermediate will offset losses from the drop in Dfa Intermediate's long position.| SPDR Russell vs. SPDR Russell 1000 | SPDR Russell vs. SPDR MSCI USA | SPDR Russell vs. SPDR SP 400 | SPDR Russell vs. SPDR MSCI EAFE |
| Dfa Intermediate vs. Dfa Five Year Global | Dfa Intermediate vs. Large Cap International | Dfa Intermediate vs. Us Large Cap | Dfa Intermediate 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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