Correlation Between Dfa International and Dfa Short

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Can any of the company-specific risk be diversified away by investing in both Dfa International and Dfa Short 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 International and Dfa Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa International and Dfa Short Term Extended, you can compare the effects of market volatilities on Dfa International and Dfa Short 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 International with a short position of Dfa Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa International and Dfa Short.

Diversification Opportunities for Dfa International and Dfa Short

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Dfa and Dfa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dfa International and Dfa Short Term Extended in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Short Term and Dfa International 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 International are associated (or correlated) with Dfa Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Short Term has no effect on the direction of Dfa International i.e., Dfa International and Dfa Short go up and down completely randomly.

Pair Corralation between Dfa International and Dfa Short

If you would invest  1,780  in Dfa International on May 4, 2025 and sell it today you would earn a total of  39.00  from holding Dfa International or generate 2.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Dfa International  vs.  Dfa Short Term Extended

 Performance 
       Timeline  
Dfa International 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Dfa International are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dfa International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Dfa Short Term 

Risk-Adjusted Performance

Very Weak

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

Dfa International and Dfa Short Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dfa International and Dfa Short

The main advantage of trading using opposite Dfa International and Dfa Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa International position performs unexpectedly, Dfa Short 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 Short will offset losses from the drop in Dfa Short's long position.
The idea behind Dfa International and Dfa Short Term Extended 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.
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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