Correlation Between Simt Real and Dfa Commodity

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

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

Diversification Opportunities for Simt Real and Dfa Commodity

0.32

Correlation Coefficient

Simt Real  Dfa Commodity

Weak diversification

The 3 months correlation between Simt and Dfa is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Simt Real Estate and Dfa Commodity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Commodity Strategy and Simt Real 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 Simt Real Estate are associated (or correlated) with Dfa Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Commodity Strategy has no effect on the direction of Simt Real i.e., Simt Real and Dfa Commodity go up and down completely randomly.

Pair Corralation between Simt Real and Dfa Commodity

Assuming the 90 days horizon Simt Real Estate is expected to under-perform the Dfa Commodity. In addition to that, Simt Real is 1.55 times more volatile than Dfa Commodity Strategy. It trades about -0.12 of its total potential returns per unit of risk. Dfa Commodity Strategy is currently generating about -0.01 per unit of volatility. If you would invest  449.00  in Dfa Commodity Strategy on October 7, 2024 and sell it today you would lose (2.00) from holding Dfa Commodity Strategy or give up 0.45% of portfolio value over 90 days.

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

Simt Real Estate  vs.  Dfa Commodity Strategy

Simt Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dfa Commodity Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Simt Real and Dfa Commodity

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

The idea behind Simt Real Estate and Dfa Commodity Strategy 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..