Correlation Between Dimensional International and Global X
Can any of the company-specific risk be diversified away by investing in both Dimensional International and Global X 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 International and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional International High and Global X Funds, you can compare the effects of market volatilities on Dimensional International and Global X 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 International with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional International and Global X.
Diversification Opportunities for Dimensional International and Global X
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dimensional and Global is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional International High and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and Dimensional International 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 International High are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Dimensional International i.e., Dimensional International and Global X go up and down completely randomly.
Pair Corralation between Dimensional International and Global X
Given the investment horizon of 90 days Dimensional International High is expected to generate 0.99 times more return on investment than Global X. However, Dimensional International High is 1.01 times less risky than Global X. It trades about 0.05 of its potential returns per unit of risk. Global X Funds is currently generating about -0.04 per unit of risk. If you would invest 2,615 in Dimensional International High on September 12, 2024 and sell it today you would earn a total of 16.00 from holding Dimensional International High or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional International High vs. Global X Funds
Performance |
| Timeline |
| Dimensional International |
| Global X Funds |
Dimensional International and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional International and Global X
The main advantage of trading using opposite Dimensional International and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional International position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Dimensional International vs. iShares MSCI Intl | Dimensional International vs. iShares MSCI Intl | Dimensional International vs. iShares Currency Hedged | Dimensional International vs. iShares Edge MSCI |
| Global X vs. FT Vest Equity | Global X vs. Northern Lights | Global X vs. Dimensional International High | Global X vs. JPMorgan Fundamental Data |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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