Correlation Between Chesapeake Granite and Dfa Targeted

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

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

Diversification Opportunities for Chesapeake Granite and Dfa Targeted

0.38

Correlation Coefficient

Chesapeake Granite  Dfa Targeted

Weak diversification

The 3 months correlation between Chesapeake and Dfa is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Granite Wash and Dfa Targeted Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Targeted Credit and Chesapeake Granite 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 Chesapeake Granite Wash are associated (or correlated) with Dfa Targeted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Targeted Credit has no effect on the direction of Chesapeake Granite i.e., Chesapeake Granite and Dfa Targeted go up and down completely randomly.

Pair Corralation between Chesapeake Granite and Dfa Targeted

If you would invest  943.00  in Dfa Targeted Credit on October 5, 2024 and sell it today you would earn a total of  10.00  from holding Dfa Targeted Credit or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.64%
Values	Daily Returns

Chesapeake Granite Wash  vs.  Dfa Targeted Credit

Chesapeake Granite Wash

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chesapeake Granite Wash has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Chesapeake Granite is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Dfa Targeted Credit

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa Targeted Credit are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dfa Targeted is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chesapeake Granite and Dfa Targeted

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

The idea behind Chesapeake Granite Wash and Dfa Targeted Credit 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.