Correlation Between Fam Equity-income and Df Dent

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

By analyzing existing cross correlation between Fam Equity Income Fund and Df Dent Premier, you can compare the effects of market volatilities on Fam Equity-income 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 Fam Equity-income with a short position of Df Dent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fam Equity-income and Df Dent.

Diversification Opportunities for Fam Equity-income and Df Dent

0.52

Correlation Coefficient

Fam Equity-income  Df Dent

Very weak diversification

The 3 months correlation between Fam and DFDPX is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fam Equity Income Fund and Df Dent Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Df Dent Premier and Fam Equity-income 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 Fam Equity Income Fund 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 Premier has no effect on the direction of Fam Equity-income i.e., Fam Equity-income and Df Dent go up and down completely randomly.

Pair Corralation between Fam Equity-income and Df Dent

Assuming the 90 days horizon Fam Equity-income is expected to generate 6.83 times less return on investment than Df Dent. But when comparing it to its historical volatility, Fam Equity Income Fund is 1.04 times less risky than Df Dent. It trades about 0.02 of its potential returns per unit of risk. Df Dent Premier is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  3,685  in Df Dent Premier on May 8, 2025 and sell it today you would earn a total of  295.00  from holding Df Dent Premier or generate 8.01% return on investment over 90 days.

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

Fam Equity Income Fund  vs.  Df Dent Premier

Fam Equity Income

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fam Equity Income Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fam Equity-income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Df Dent Premier

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Df Dent Premier are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Df Dent may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Fam Equity-income and Df Dent

The main advantage of trading using opposite Fam Equity-income and Df Dent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fam Equity-income 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 Fam Equity Income Fund and Df Dent Premier 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.