Correlation Between Dfa Investment and Us E

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

By analyzing existing cross correlation between Dfa Investment Grade and Us E Equity, you can compare the effects of market volatilities on Dfa Investment and Us E 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 Investment with a short position of Us E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa Investment and Us E.

Diversification Opportunities for Dfa Investment and Us E

0.73

Correlation Coefficient

Dfa Investment  Us E

Poor diversification

The 3 months correlation between Dfa and DFEOX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dfa Investment Grade and Us E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us E Equity and Dfa Investment 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 Investment Grade are associated (or correlated) with Us E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us E Equity has no effect on the direction of Dfa Investment i.e., Dfa Investment and Us E go up and down completely randomly.

Pair Corralation between Dfa Investment and Us E

Assuming the 90 days horizon Dfa Investment is expected to generate 3.48 times less return on investment than Us E. But when comparing it to its historical volatility, Dfa Investment Grade is 2.59 times less risky than Us E. It trades about 0.15 of its potential returns per unit of risk. Us E Equity is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,122  in Us E Equity on May 5, 2025 and sell it today you would earn a total of  415.00  from holding Us E Equity or generate 10.07% return on investment over 90 days.

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

Dfa Investment Grade  vs.  Us E Equity

Dfa Investment Grade

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa Investment Grade are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dfa Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Us E Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Us E Equity are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Us E may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dfa Investment and Us E

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

The idea behind Dfa Investment Grade and Us E Equity 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.