Correlation Between Dfa - and Intal High

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

By analyzing existing cross correlation between Dfa Small and Intal High Relative, you can compare the effects of market volatilities on Dfa - and Intal High 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 - with a short position of Intal High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa - and Intal High.

Diversification Opportunities for Dfa - and Intal High

-0.07

Correlation Coefficient

Dfa -  Intal High

Good diversification

The 3 months correlation between Dfa and Intal is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dfa Small and Intal High Relative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intal High Relative and Dfa - 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 Small are associated (or correlated) with Intal High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intal High Relative has no effect on the direction of Dfa - i.e., Dfa - and Intal High go up and down completely randomly.

Pair Corralation between Dfa - and Intal High

Assuming the 90 days horizon Dfa Small is expected to under-perform the Intal High. In addition to that, Dfa - is 1.34 times more volatile than Intal High Relative. It trades about -0.19 of its total potential returns per unit of risk. Intal High Relative is currently generating about -0.04 per unit of volatility. If you would invest  1,240  in Intal High Relative on January 9, 2025 and sell it today you would lose (42.00) from holding Intal High Relative or give up 3.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Dfa Small  vs.  Intal High Relative

Dfa Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dfa Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Intal High Relative

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intal High Relative has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Intal High 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 - and Intal High

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

The idea behind Dfa Small and Intal High Relative 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.