Correlation Between Dimensional Core and God Bless
Can any of the company-specific risk be diversified away by investing in both Dimensional Core and God Bless 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 Dimensional Core and God Bless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional Core Equity and God Bless America, you can compare the effects of market volatilities on Dimensional Core and God Bless 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 Dimensional Core with a short position of God Bless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Core and God Bless.
Diversification Opportunities for Dimensional Core and God Bless
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dimensional and God is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Core Equity and God Bless America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on God Bless America and Dimensional Core 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 Dimensional Core Equity are associated (or correlated) with God Bless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of God Bless America has no effect on the direction of Dimensional Core i.e., Dimensional Core and God Bless go up and down completely randomly.
Pair Corralation between Dimensional Core and God Bless
Given the investment horizon of 90 days Dimensional Core is expected to generate 1.25 times less return on investment than God Bless. But when comparing it to its historical volatility, Dimensional Core Equity is 1.26 times less risky than God Bless. It trades about 0.35 of its potential returns per unit of risk. God Bless America is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 3,680 in God Bless America on September 5, 2024 and sell it today you would earn a total of 321.00 from holding God Bless America or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional Core Equity vs. God Bless America
Performance |
| Timeline |
| Dimensional Core Equity |
| God Bless America |
Dimensional Core and God Bless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional Core and God Bless
The main advantage of trading using opposite Dimensional Core and God Bless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Core position performs unexpectedly, God Bless 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 God Bless will offset losses from the drop in God Bless' long position.| Dimensional Core vs. Vanguard Total Stock | Dimensional Core vs. SPDR SP 500 | Dimensional Core vs. iShares Core SP | Dimensional Core vs. Vanguard Dividend Appreciation |
| God Bless vs. Vanguard Total Stock | God Bless vs. SPDR SP 500 | God Bless vs. iShares Core SP | God Bless vs. Vanguard Dividend Appreciation |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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