Correlation Between Dfa Targeted and Dfa Inflation
Can any of the company-specific risk be diversified away by investing in both Dfa Targeted and Dfa Inflation 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 Targeted and Dfa Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa Targeted Credit and Dfa Inflation Protected, you can compare the effects of market volatilities on Dfa Targeted and Dfa Inflation 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 Targeted with a short position of Dfa Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa Targeted and Dfa Inflation.
Diversification Opportunities for Dfa Targeted and Dfa Inflation
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dfa and Dfa is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dfa Targeted Credit and Dfa Inflation Protected in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Inflation Protected and Dfa Targeted 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 Targeted Credit are associated (or correlated) with Dfa Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Inflation Protected has no effect on the direction of Dfa Targeted i.e., Dfa Targeted and Dfa Inflation go up and down completely randomly.
Pair Corralation between Dfa Targeted and Dfa Inflation
Assuming the 90 days horizon Dfa Targeted is expected to generate 2.51 times less return on investment than Dfa Inflation. But when comparing it to its historical volatility, Dfa Targeted Credit is 2.62 times less risky than Dfa Inflation. It trades about 0.21 of its potential returns per unit of risk. Dfa Inflation Protected is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Dfa Inflation Protected on June 4, 2025 and sell it today you would earn a total of 32.00 from holding Dfa Inflation Protected or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dfa Targeted Credit vs. Dfa Inflation Protected
Performance |
| Timeline |
| Dfa Targeted Credit |
| Dfa Inflation Protected |
Dfa Targeted and Dfa Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dfa Targeted and Dfa Inflation
The main advantage of trading using opposite Dfa Targeted and Dfa Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa Targeted position performs unexpectedly, Dfa Inflation 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 Inflation will offset losses from the drop in Dfa Inflation's long position.| Dfa Targeted vs. Shelton Emerging Markets | Dfa Targeted vs. Barings Active Short | Dfa Targeted vs. Ashmore Emerging Markets | Dfa Targeted vs. Balanced Strategy Fund |
| Dfa Inflation vs. International E Equity | Dfa Inflation vs. Dfa Real Estate | Dfa Inflation vs. Emerging Markets E | Dfa Inflation vs. Dfa Five Year Global |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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