Correlation Between Dfa Short-duration and Praxis International

Can any of the company-specific risk be diversified away by investing in both Dfa Short-duration and Praxis International 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 Short-duration and Praxis International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dfa Short Duration Real and Praxis International Index, you can compare the effects of market volatilities on Dfa Short-duration and Praxis International 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 Short-duration with a short position of Praxis International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa Short-duration and Praxis International.

Diversification Opportunities for Dfa Short-duration and Praxis International

0.84

Correlation Coefficient

Dfa Short-duration  Praxis International

Very poor diversification

The 3 months correlation between Dfa and Praxis is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dfa Short Duration Real and Praxis International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis International and Dfa Short-duration 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 Short Duration Real are associated (or correlated) with Praxis International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis International has no effect on the direction of Dfa Short-duration i.e., Dfa Short-duration and Praxis International go up and down completely randomly.

Pair Corralation between Dfa Short-duration and Praxis International

Assuming the 90 days horizon Dfa Short-duration is expected to generate 4.48 times less return on investment than Praxis International. But when comparing it to its historical volatility, Dfa Short Duration Real is 10.98 times less risky than Praxis International. It trades about 0.41 of its potential returns per unit of risk. Praxis International Index is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,413  in Praxis International Index on May 13, 2025 and sell it today you would earn a total of  95.00  from holding Praxis International Index or generate 6.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Dfa Short Duration Real  vs.  Praxis International Index

Dfa Short Duration

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa Short Duration Real are ranked lower than 32 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Dfa Short-duration is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Praxis International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Praxis International Index are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Praxis International may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dfa Short-duration and Praxis International

The main advantage of trading using opposite Dfa Short-duration and Praxis International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa Short-duration position performs unexpectedly, Praxis International 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 Praxis International will offset losses from the drop in Praxis International's long position.

The idea behind Dfa Short Duration Real and Praxis International Index pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stocks Directory module to find actively traded stocks across global markets.