Correlation Between Dimensional International and FT Vest
Can any of the company-specific risk be diversified away by investing in both Dimensional International and FT Vest 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 FT Vest 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 FT Vest Nasdaq 100, you can compare the effects of market volatilities on Dimensional International and FT Vest 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 FT Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional International and FT Vest.
Diversification Opportunities for Dimensional International and FT Vest
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dimensional and QMAG is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional International High and FT Vest Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Vest Nasdaq 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 FT Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Vest Nasdaq has no effect on the direction of Dimensional International i.e., Dimensional International and FT Vest go up and down completely randomly.
Pair Corralation between Dimensional International and FT Vest
Given the investment horizon of 90 days Dimensional International is expected to generate 1.12 times less return on investment than FT Vest. In addition to that, Dimensional International is 1.64 times more volatile than FT Vest Nasdaq 100. It trades about 0.06 of its total potential returns per unit of risk. FT Vest Nasdaq 100 is currently generating about 0.11 per unit of volatility. If you would invest 2,010 in FT Vest Nasdaq 100 on September 12, 2024 and sell it today you would earn a total of 87.00 from holding FT Vest Nasdaq 100 or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 16.16% |
| Values | Daily Returns |
Dimensional International High vs. FT Vest Nasdaq 100
Performance |
| Timeline |
| Dimensional International |
| FT Vest Nasdaq |
Dimensional International and FT Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional International and FT Vest
The main advantage of trading using opposite Dimensional International and FT Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional International position performs unexpectedly, FT Vest 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 FT Vest will offset losses from the drop in FT Vest'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 |
| FT Vest vs. FT Vest Equity | FT Vest vs. Northern Lights | FT Vest vs. Dimensional International High | FT Vest 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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