Correlation Between Dfa International and Dfa Commodity
Can any of the company-specific risk be diversified away by investing in both Dfa International 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 Dfa International and Dfa Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa International Social and Dfa Commodity Strategy, you can compare the effects of market volatilities on Dfa International 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 Dfa International with a short position of Dfa Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa International and Dfa Commodity.
Diversification Opportunities for Dfa International and Dfa Commodity
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dfa and Dfa is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dfa International Social 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 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 Social 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 Dfa International i.e., Dfa International and Dfa Commodity go up and down completely randomly.
Pair Corralation between Dfa International and Dfa Commodity
Assuming the 90 days horizon Dfa International Social is expected to generate 0.79 times more return on investment than Dfa Commodity. However, Dfa International Social is 1.27 times less risky than Dfa Commodity. It trades about 0.26 of its potential returns per unit of risk. Dfa Commodity Strategy is currently generating about -0.08 per unit of risk. If you would invest 1,673 in Dfa International Social on April 21, 2025 and sell it today you would earn a total of 59.00 from holding Dfa International Social or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dfa International Social vs. Dfa Commodity Strategy
Performance |
| Timeline |
| Dfa International Social |
| Dfa Commodity Strategy |
Dfa International and Dfa Commodity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dfa International and Dfa Commodity
The main advantage of trading using opposite Dfa International and Dfa Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa International 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.| Dfa International vs. Franklin Government Securities | Dfa International vs. Ridgeworth Seix Government | Dfa International vs. Wesmark Government Bond | Dfa International vs. Dreyfus Government Cash |
| Dfa Commodity vs. Volumetric Fund Volumetric | Dfa Commodity vs. Small Cap Stock | Dfa Commodity vs. Gmo Quality Fund | Dfa Commodity vs. Nasdaq 100 Index 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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