Correlation Between Wealthsimple Shariah and Dfa Ltip

Can any of the company-specific risk be diversified away by investing in both Wealthsimple Shariah and Dfa Ltip 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 Wealthsimple Shariah and Dfa Ltip into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wealthsimple Shariah World and Dfa Ltip Portfolio, you can compare the effects of market volatilities on Wealthsimple Shariah and Dfa Ltip 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 Wealthsimple Shariah with a short position of Dfa Ltip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wealthsimple Shariah and Dfa Ltip.

Diversification Opportunities for Wealthsimple Shariah and Dfa Ltip

0.58

Correlation Coefficient

Wealthsimple Shariah  Dfa Ltip

Very weak diversification

The 3 months correlation between Wealthsimple and Dfa is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Wealthsimple Shariah World and Dfa Ltip Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Ltip Portfolio and Wealthsimple Shariah 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 Wealthsimple Shariah World are associated (or correlated) with Dfa Ltip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Ltip Portfolio has no effect on the direction of Wealthsimple Shariah i.e., Wealthsimple Shariah and Dfa Ltip go up and down completely randomly.

Pair Corralation between Wealthsimple Shariah and Dfa Ltip

Assuming the 90 days trading horizon Wealthsimple Shariah is expected to generate 1.73 times less return on investment than Dfa Ltip. But when comparing it to its historical volatility, Wealthsimple Shariah World is 1.02 times less risky than Dfa Ltip. It trades about 0.06 of its potential returns per unit of risk. Dfa Ltip Portfolio is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  517.00  in Dfa Ltip Portfolio on August 28, 2025 and sell it today you would earn a total of  23.00  from holding Dfa Ltip Portfolio or generate 4.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Wealthsimple Shariah World  vs.  Dfa Ltip Portfolio

Wealthsimple Shariah

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Wealthsimple Shariah World are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Wealthsimple Shariah is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Dfa Ltip Portfolio

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa Ltip Portfolio are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Dfa Ltip is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wealthsimple Shariah and Dfa Ltip

The main advantage of trading using opposite Wealthsimple Shariah and Dfa Ltip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wealthsimple Shariah position performs unexpectedly, Dfa Ltip 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 Ltip will offset losses from the drop in Dfa Ltip's long position.

The idea behind Wealthsimple Shariah World and Dfa Ltip Portfolio pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..