Correlation Between Dfa Mn and Dfa Five-year
Can any of the company-specific risk be diversified away by investing in both Dfa Mn and Dfa Five-year 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 Mn and Dfa Five-year into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa Mn Municipal and Dfa Five Year Global, you can compare the effects of market volatilities on Dfa Mn and Dfa Five-year 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 Mn with a short position of Dfa Five-year. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa Mn and Dfa Five-year.
Diversification Opportunities for Dfa Mn and Dfa Five-year
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dfa and Dfa is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dfa Mn Municipal and Dfa Five Year Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Five Year and Dfa Mn 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 Mn Municipal are associated (or correlated) with Dfa Five-year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Five Year has no effect on the direction of Dfa Mn i.e., Dfa Mn and Dfa Five-year go up and down completely randomly.
Pair Corralation between Dfa Mn and Dfa Five-year
Assuming the 90 days horizon Dfa Mn is expected to generate 3.56 times less return on investment than Dfa Five-year. But when comparing it to its historical volatility, Dfa Mn Municipal is 1.39 times less risky than Dfa Five-year. It trades about 0.14 of its potential returns per unit of risk. Dfa Five Year Global is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,003 in Dfa Five Year Global on July 25, 2025 and sell it today you would earn a total of 14.00 from holding Dfa Five Year Global or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Dfa Mn Municipal vs. Dfa Five Year Global
Performance |
| Timeline |
| Dfa Mn Municipal |
| Dfa Five Year |
Dfa Mn and Dfa Five-year Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dfa Mn and Dfa Five-year
The main advantage of trading using opposite Dfa Mn and Dfa Five-year positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa Mn position performs unexpectedly, Dfa Five-year 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 Five-year will offset losses from the drop in Dfa Five-year's long position.| Dfa Mn vs. Payden High Income | Dfa Mn vs. Alpine High Yield | Dfa Mn vs. Fidelity Capital Income | Dfa Mn vs. Lord Abbett Short |
| Dfa Five-year vs. Auer Growth Fund | Dfa Five-year vs. Western Asset Short | Dfa Five-year vs. Pnc Emerging Markets | Dfa Five-year vs. Barings Active Short |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |