Correlation Between Wmcanx and Dfa Five-year
Can any of the company-specific risk be diversified away by investing in both Wmcanx 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 Wmcanx 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 Wmcanx and Dfa Five Year Global, you can compare the effects of market volatilities on Wmcanx 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 Wmcanx with a short position of Dfa Five-year. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wmcanx and Dfa Five-year.
Diversification Opportunities for Wmcanx and Dfa Five-year
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wmcanx and Dfa is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Wmcanx 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 Wmcanx 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 Wmcanx 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 Wmcanx i.e., Wmcanx and Dfa Five-year go up and down completely randomly.
Pair Corralation between Wmcanx and Dfa Five-year
Assuming the 90 days trading horizon Wmcanx is expected to generate 9.88 times more return on investment than Dfa Five-year. However, Wmcanx is 9.88 times more volatile than Dfa Five Year Global. It trades about 0.2 of its potential returns per unit of risk. Dfa Five Year Global is currently generating about 0.36 per unit of risk. If you would invest 1,760 in Wmcanx on June 8, 2025 and sell it today you would earn a total of 114.00 from holding Wmcanx or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wmcanx vs. Dfa Five Year Global
Performance |
| Timeline |
| Wmcanx |
| Dfa Five Year |
Wmcanx and Dfa Five-year Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wmcanx and Dfa Five-year
The main advantage of trading using opposite Wmcanx and Dfa Five-year positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wmcanx 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.| Wmcanx vs. Vanguard Total Stock | Wmcanx vs. Vanguard 500 Index | Wmcanx vs. Vanguard Total Stock | Wmcanx vs. Vanguard Total Stock |
| Dfa Five-year vs. Nuveen Equity Longshort | Dfa Five-year vs. Vanguard Intermediate Term Tax Exempt | Dfa Five-year vs. Semiconductor Ultrasector Profund | Dfa Five-year vs. Auer Growth 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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