Correlation Between Dfa Inv and Sp Smallcap

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

By analyzing existing cross correlation between Dfa Inv Dimensions and Sp Smallcap 600, you can compare the effects of market volatilities on Dfa Inv and Sp Smallcap 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 Dfa Inv with a short position of Sp Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa Inv and Sp Smallcap.

Diversification Opportunities for Dfa Inv and Sp Smallcap

0.0

Correlation Coefficient

Dfa Inv  Sp Smallcap

Pay attention - limited upside

The 3 months correlation between Dfa and RYYCX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dfa Inv Dimensions and Sp Smallcap 600 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp Smallcap 600 and Dfa Inv 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 Dfa Inv Dimensions are associated (or correlated) with Sp Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp Smallcap 600 has no effect on the direction of Dfa Inv i.e., Dfa Inv and Sp Smallcap go up and down completely randomly.

Pair Corralation between Dfa Inv and Sp Smallcap

If you would invest (100.00) in Dfa Inv Dimensions on December 19, 2024 and sell it today you would earn a total of  100.00  from holding Dfa Inv Dimensions or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Dfa Inv Dimensions  vs.  Sp Smallcap 600

Dfa Inv Dimensions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dfa Inv Dimensions has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dfa Inv is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sp Smallcap 600

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sp Smallcap 600 has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Dfa Inv and Sp Smallcap

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

The idea behind Dfa Inv Dimensions and Sp Smallcap 600 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.