Correlation Between Dimensional ETF and WisdomTree
Can any of the company-specific risk be diversified away by investing in both Dimensional ETF and WisdomTree 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 ETF and WisdomTree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional ETF Trust and WisdomTree 1 3 Year, you can compare the effects of market volatilities on Dimensional ETF and WisdomTree 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 ETF with a short position of WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional ETF and WisdomTree.
Diversification Opportunities for Dimensional ETF and WisdomTree
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dimensional and WisdomTree is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional ETF Trust and WisdomTree 1 3 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 1 3 and Dimensional ETF 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 ETF Trust are associated (or correlated) with WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree 1 3 has no effect on the direction of Dimensional ETF i.e., Dimensional ETF and WisdomTree go up and down completely randomly.
Pair Corralation between Dimensional ETF and WisdomTree
Given the investment horizon of 90 days Dimensional ETF Trust is expected to generate 18.98 times more return on investment than WisdomTree. However, Dimensional ETF is 18.98 times more volatile than WisdomTree 1 3 Year. It trades about 0.17 of its potential returns per unit of risk. WisdomTree 1 3 Year is currently generating about 0.32 per unit of risk. If you would invest 3,252 in Dimensional ETF Trust on November 30, 2025 and sell it today you would earn a total of 373.00 from holding Dimensional ETF Trust or generate 11.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Dimensional ETF Trust vs. WisdomTree 1 3 Year
Performance |
| Timeline |
| Dimensional ETF Trust |
| WisdomTree 1 3 |
Dimensional ETF and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional ETF and WisdomTree
The main advantage of trading using opposite Dimensional ETF and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional ETF position performs unexpectedly, WisdomTree 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 WisdomTree will offset losses from the drop in WisdomTree's long position.| Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Vanguard ESG International | Dimensional ETF vs. iShares MSCI EAFE | Dimensional ETF vs. WisdomTree LargeCap Dividend |
| WisdomTree vs. Janus Henderson Mortgage Backed | WisdomTree vs. Fidelity International Small | WisdomTree vs. Fidelity International Small | WisdomTree vs. Dimensional ETF Trust |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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