Correlation Between Intal High and Dfa Municipal

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

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

Diversification Opportunities for Intal High and Dfa Municipal

0.96

Correlation Coefficient

Intal High  Dfa Municipal

Almost no diversification

The 3 months correlation between Intal and Dfa is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Intal High Relative and Dfa Municipal Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Municipal Real and Intal High 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 Intal High Relative are associated (or correlated) with Dfa Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Municipal Real has no effect on the direction of Intal High i.e., Intal High and Dfa Municipal go up and down completely randomly.

Pair Corralation between Intal High and Dfa Municipal

Assuming the 90 days horizon Intal High Relative is expected to generate 14.62 times more return on investment than Dfa Municipal. However, Intal High is 14.62 times more volatile than Dfa Municipal Real. It trades about 0.17 of its potential returns per unit of risk. Dfa Municipal Real is currently generating about 0.41 per unit of risk. If you would invest  1,249  in Intal High Relative on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Intal High Relative or generate 8.01% return on investment over 90 days.

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

Intal High Relative  vs.  Dfa Municipal Real

Intal High Relative

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intal High Relative are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Intal High may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Dfa Municipal Real

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa Municipal Real are ranked lower than 32 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Dfa Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intal High and Dfa Municipal

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

The idea behind Intal High Relative and Dfa Municipal Real 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 Transaction History module to view history of all your transactions and understand their impact on performance.