Correlation Between Dimensional 2030 and World Ex
Can any of the company-specific risk be diversified away by investing in both Dimensional 2030 and World Ex 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 2030 and World Ex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional 2030 Target and World Ex Core, you can compare the effects of market volatilities on Dimensional 2030 and World Ex 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 2030 with a short position of World Ex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional 2030 and World Ex.
Diversification Opportunities for Dimensional 2030 and World Ex
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dimensional and World is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional 2030 Target and World Ex Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Ex Core and Dimensional 2030 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 2030 Target are associated (or correlated) with World Ex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Ex Core has no effect on the direction of Dimensional 2030 i.e., Dimensional 2030 and World Ex go up and down completely randomly.
Pair Corralation between Dimensional 2030 and World Ex
Assuming the 90 days horizon Dimensional 2030 Target is expected to generate 0.62 times more return on investment than World Ex. However, Dimensional 2030 Target is 1.62 times less risky than World Ex. It trades about 0.1 of its potential returns per unit of risk. World Ex Core is currently generating about 0.0 per unit of risk. If you would invest 1,189 in Dimensional 2030 Target on August 29, 2024 and sell it today you would earn a total of 74.00 from holding Dimensional 2030 Target or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional 2030 Target vs. World Ex Core
Performance |
| Timeline |
| Dimensional 2030 Target |
| World Ex Core |
Dimensional 2030 and World Ex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional 2030 and World Ex
The main advantage of trading using opposite Dimensional 2030 and World Ex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional 2030 position performs unexpectedly, World Ex 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 World Ex will offset losses from the drop in World Ex's long position.| Dimensional 2030 vs. Vanguard Target Retirement | Dimensional 2030 vs. American Funds 2030 | Dimensional 2030 vs. American Funds 2030 | Dimensional 2030 vs. Fidelity Freedom 2030 |
| World Ex vs. Artisan Small Cap | World Ex vs. Ancorathelen Small Mid Cap | World Ex vs. Champlain Small | World Ex vs. Small Cap Growth |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |