Correlation Between Us High and Dfa Large

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

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

Diversification Opportunities for Us High and Dfa Large

1.0

Correlation Coefficient

Us High  Dfa Large

No risk reduction

The 3 months correlation between DURPX and Dfa is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Us High Relative and Dfa Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Large and Us High 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 Us High Relative are associated (or correlated) with Dfa Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Large has no effect on the direction of Us High i.e., Us High and Dfa Large go up and down completely randomly.

Pair Corralation between Us High and Dfa Large

Assuming the 90 days horizon Us High is expected to generate 1.04 times less return on investment than Dfa Large. In addition to that, Us High is 1.02 times more volatile than Dfa Large. It trades about 0.2 of its total potential returns per unit of risk. Dfa Large is currently generating about 0.21 per unit of volatility. If you would invest  3,714  in Dfa Large on May 6, 2025 and sell it today you would earn a total of  382.00  from holding Dfa Large or generate 10.29% return on investment over 90 days.

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

Us High Relative  vs.  Dfa Large

Us High Relative

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Us High Relative 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 High may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Dfa Large

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa Large are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Dfa Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Us High and Dfa Large

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

The idea behind Us High Relative and Dfa Large 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.