Correlation Between Dfa International and Northern Global
Can any of the company-specific risk be diversified away by investing in both Dfa International and Northern Global 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 International and Northern Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa International Real and Northern Global Real, you can compare the effects of market volatilities on Dfa International and Northern Global 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 International with a short position of Northern Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa International and Northern Global.
Diversification Opportunities for Dfa International and Northern Global
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dfa and Northern is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Dfa International Real and Northern Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Global Real and Dfa International 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 International Real are associated (or correlated) with Northern Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Global Real has no effect on the direction of Dfa International i.e., Dfa International and Northern Global go up and down completely randomly.
Pair Corralation between Dfa International and Northern Global
Assuming the 90 days horizon Dfa International Real is expected to generate 1.0 times more return on investment than Northern Global. However, Dfa International Real is 1.0 times less risky than Northern Global. It trades about 0.22 of its potential returns per unit of risk. Northern Global Real is currently generating about 0.15 per unit of risk. If you would invest 357.00 in Dfa International Real on April 29, 2025 and sell it today you would earn a total of 31.00 from holding Dfa International Real or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dfa International Real vs. Northern Global Real
Performance |
| Timeline |
| Dfa International Real |
| Northern Global Real |
Dfa International and Northern Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dfa International and Northern Global
The main advantage of trading using opposite Dfa International and Northern Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa International position performs unexpectedly, Northern Global 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 Northern Global will offset losses from the drop in Northern Global's long position.| Dfa International vs. Mid Cap 15x Strategy | Dfa International vs. Vanguard Small Cap Value | Dfa International vs. Omni Small Cap Value | Dfa International vs. Amg River Road |
| Northern Global vs. Commonwealth Global Fund | Northern Global vs. Auer Growth Fund | Northern Global vs. Astor Star Fund | Northern Global vs. Rbb Fund |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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