Correlation Between Dimensional ETF and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both Dimensional ETF and WisdomTree International 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 International 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 International SmallCap, you can compare the effects of market volatilities on Dimensional ETF and WisdomTree International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional ETF and WisdomTree International.
Diversification Opportunities for Dimensional ETF and WisdomTree International
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dimensional and WisdomTree is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional ETF Trust and WisdomTree International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of Dimensional ETF i.e., Dimensional ETF and WisdomTree International go up and down completely randomly.
Pair Corralation between Dimensional ETF and WisdomTree International
Given the investment horizon of 90 days Dimensional ETF Trust is expected to generate 1.05 times more return on investment than WisdomTree International. However, Dimensional ETF is 1.05 times more volatile than WisdomTree International SmallCap. It trades about 0.06 of its potential returns per unit of risk. WisdomTree International SmallCap is currently generating about 0.05 per unit of risk. If you would invest 2,398 in Dimensional ETF Trust on August 24, 2024 and sell it today you would earn a total of 295.00 from holding Dimensional ETF Trust or generate 12.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional ETF Trust vs. WisdomTree International Small
Performance |
| Timeline |
| Dimensional ETF Trust |
| WisdomTree International |
Dimensional ETF and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional ETF and WisdomTree International
The main advantage of trading using opposite Dimensional ETF and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional ETF position performs unexpectedly, WisdomTree International 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 International will offset losses from the drop in WisdomTree International's long position.| Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional International Value | Dimensional ETF vs. Dimensional Targeted Value |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |