Correlation Between Dfa Real and International Core
Can any of the company-specific risk be diversified away by investing in both Dfa Real and International Core 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 Real and International Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa Real Estate and International E Equity, you can compare the effects of market volatilities on Dfa Real and International Core 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 Real with a short position of International Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa Real and International Core.
Diversification Opportunities for Dfa Real and International Core
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dfa and International is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dfa Real Estate and International E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International E Equity and Dfa 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 Dfa Real Estate are associated (or correlated) with International Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International E Equity has no effect on the direction of Dfa Real i.e., Dfa Real and International Core go up and down completely randomly.
Pair Corralation between Dfa Real and International Core
Assuming the 90 days horizon Dfa Real is expected to generate 2.66 times less return on investment than International Core. In addition to that, Dfa Real is 1.28 times more volatile than International E Equity. It trades about 0.08 of its total potential returns per unit of risk. International E Equity is currently generating about 0.28 per unit of volatility. If you would invest 1,651 in International E Equity on April 22, 2025 and sell it today you would earn a total of 186.00 from holding International E Equity or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dfa Real Estate vs. International E Equity
Performance |
| Timeline |
| Dfa Real Estate |
| International E Equity |
Dfa Real and International Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dfa Real and International Core
The main advantage of trading using opposite Dfa Real and International Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa Real position performs unexpectedly, International Core 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 International Core will offset losses from the drop in International Core's long position.| Dfa Real vs. Dfa International Small | Dfa Real vs. Us Large Cap | Dfa Real vs. International Small Pany | Dfa Real vs. Dfa International Value |
| International Core vs. Emerging Markets E | International Core vs. Us E Equity | International Core vs. Us E Equity | International Core vs. Dfa Real Estate |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |