Correlation Between Investment Managers and Df Dent

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

By analyzing existing cross correlation between Investment Managers Series and Df Dent Midcap, you can compare the effects of market volatilities on Investment Managers and Df Dent 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 Investment Managers with a short position of Df Dent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment Managers and Df Dent.

Diversification Opportunities for Investment Managers and Df Dent

0.33

Correlation Coefficient

Investment Managers  Df Dent

Weak diversification

The 3 months correlation between Investment and DFMLX is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Investment Managers Series and Df Dent Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Df Dent Midcap and Investment Managers 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 Investment Managers Series are associated (or correlated) with Df Dent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Df Dent Midcap has no effect on the direction of Investment Managers i.e., Investment Managers and Df Dent go up and down completely randomly.

Pair Corralation between Investment Managers and Df Dent

Assuming the 90 days horizon Investment Managers Series is expected to generate 1.85 times more return on investment than Df Dent. However, Investment Managers is 1.85 times more volatile than Df Dent Midcap. It trades about 0.23 of its potential returns per unit of risk. Df Dent Midcap is currently generating about 0.13 per unit of risk. If you would invest  1,210  in Investment Managers Series on May 17, 2025 and sell it today you would earn a total of  299.00  from holding Investment Managers Series or generate 24.71% return on investment over 90 days.

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

Investment Managers Series  vs.  Df Dent Midcap

Investment Managers

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Investment Managers Series are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Investment Managers showed solid returns over the last few months and may actually be approaching a breakup point.

Df Dent Midcap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Df Dent Midcap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Df Dent may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Investment Managers and Df Dent

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

The idea behind Investment Managers Series and Df Dent Midcap 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.