Correlation Between Siit Emerging and Dfa Emerging

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

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

Diversification Opportunities for Siit Emerging and Dfa Emerging

0.67

Correlation Coefficient

Siit Emerging  Dfa Emerging

Poor diversification

The 3 months correlation between Siit and Dfa is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Siit Emerging Markets and Dfa Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Emerging Markets and Siit Emerging 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 Siit Emerging Markets are associated (or correlated) with Dfa Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Emerging Markets has no effect on the direction of Siit Emerging i.e., Siit Emerging and Dfa Emerging go up and down completely randomly.

Pair Corralation between Siit Emerging and Dfa Emerging

Assuming the 90 days horizon Siit Emerging is expected to generate 1.43 times less return on investment than Dfa Emerging. But when comparing it to its historical volatility, Siit Emerging Markets is 2.89 times less risky than Dfa Emerging. It trades about 0.43 of its potential returns per unit of risk. Dfa Emerging Markets is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,567  in Dfa Emerging Markets on May 17, 2025 and sell it today you would earn a total of  149.00  from holding Dfa Emerging Markets or generate 9.51% return on investment over 90 days.

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

Siit Emerging Markets  vs.  Dfa Emerging Markets

Siit Emerging Markets

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Emerging Markets are ranked lower than 34 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Siit Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Dfa Emerging Markets

Risk-Adjusted Performance

Solid

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

Pair Trading with Siit Emerging and Dfa Emerging

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

The idea behind Siit Emerging Markets and Dfa Emerging Markets 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.