Correlation Between Us Lg and Dfa Emerging
Can any of the company-specific risk be diversified away by investing in both Us Lg and Dfa Emerging 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 Us Lg and Dfa Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Lg Cap and Dfa Emerging Markets, you can compare the effects of market volatilities on Us Lg and Dfa Emerging 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 Us Lg with a short position of Dfa Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Lg and Dfa Emerging.
Diversification Opportunities for Us Lg and Dfa Emerging
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between DUSQX and Dfa is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Us Lg Cap and Dfa Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Emerging Markets and Us Lg 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 Us Lg Cap are associated (or correlated) with Dfa Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Emerging Markets has no effect on the direction of Us Lg i.e., Us Lg and Dfa Emerging go up and down completely randomly.
Pair Corralation between Us Lg and Dfa Emerging
Assuming the 90 days horizon Us Lg Cap is expected to generate 1.0 times more return on investment than Dfa Emerging. However, Us Lg Cap is 1.0 times less risky than Dfa Emerging. It trades about 0.32 of its potential returns per unit of risk. Dfa Emerging Markets is currently generating about 0.31 per unit of risk. If you would invest 3,049 in Us Lg Cap on April 30, 2025 and sell it today you would earn a total of 452.00 from holding Us Lg Cap or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Lg Cap vs. Dfa Emerging Markets
Performance |
| Timeline |
| Us Lg Cap |
| Dfa Emerging Markets |
Us Lg and Dfa Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Lg and Dfa Emerging
The main advantage of trading using opposite Us Lg and Dfa Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Lg position performs unexpectedly, Dfa Emerging 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 Emerging will offset losses from the drop in Dfa Emerging's long position.| Us Lg vs. Dfa International Value | Us Lg vs. Us Large Pany | Us Lg vs. Dfa Investment Grade | Us Lg vs. Dfa Sustainability Core |
| Dfa Emerging vs. Intermediate Term Tax Free Bond | Dfa Emerging vs. Bbh Intermediate Municipal | Dfa Emerging vs. Gmo High Yield | Dfa Emerging vs. Ab Bond Inflation |
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 Stocks Directory module to find actively traded stocks across global markets.
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