Correlation Between Dfa Global and International

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

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

Diversification Opportunities for Dfa Global and International

0.35

Correlation Coefficient

Dfa Global  International

Weak diversification

The 3 months correlation between Dfa and International is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dfa Global Real and International E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International E Equity and Dfa Global 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 Global Real are associated (or correlated) with International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International E Equity has no effect on the direction of Dfa Global i.e., Dfa Global and International go up and down completely randomly.

Pair Corralation between Dfa Global and International

Assuming the 90 days horizon Dfa Global Real is expected to under-perform the International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dfa Global Real is 1.07 times less risky than International. The mutual fund trades about -0.01 of its potential returns per unit of risk. The International E Equity is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,921  in International E Equity on September 9, 2025 and sell it today you would earn a total of  84.00  from holding International E Equity or generate 4.37% return on investment over 90 days.

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

Dfa Global Real  vs.  International E Equity

Dfa Global Real

Risk-Adjusted Performance

Weakest

Over the last 90 days Dfa Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Dfa Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

International E Equity

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in International E Equity are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dfa Global and International

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

The idea behind Dfa Global Real and International 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .