Correlation Between ARK Fintech and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both ARK Fintech and Dimensional ETF 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 ARK Fintech and Dimensional ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARK Fintech Innovation and Dimensional ETF Trust, you can compare the effects of market volatilities on ARK Fintech and Dimensional ETF 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 ARK Fintech with a short position of Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Fintech and Dimensional ETF.
Diversification Opportunities for ARK Fintech and Dimensional ETF
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ARK and Dimensional is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ARK Fintech Innovation and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust and ARK Fintech 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 ARK Fintech Innovation are associated (or correlated) with Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of ARK Fintech i.e., ARK Fintech and Dimensional ETF go up and down completely randomly.
Pair Corralation between ARK Fintech and Dimensional ETF
Given the investment horizon of 90 days ARK Fintech Innovation is expected to under-perform the Dimensional ETF. In addition to that, ARK Fintech is 2.9 times more volatile than Dimensional ETF Trust. It trades about -0.03 of its total potential returns per unit of risk. Dimensional ETF Trust is currently generating about -0.02 per unit of volatility. If you would invest 2,377 in Dimensional ETF Trust on September 5, 2025 and sell it today you would lose (27.00) from holding Dimensional ETF Trust or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
ARK Fintech Innovation vs. Dimensional ETF Trust
Performance |
| Timeline |
| ARK Fintech Innovation |
| Dimensional ETF Trust |
ARK Fintech and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARK Fintech and Dimensional ETF
The main advantage of trading using opposite ARK Fintech and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK Fintech position performs unexpectedly, Dimensional ETF 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 Dimensional ETF will offset losses from the drop in Dimensional ETF's long position.| ARK Fintech vs. Strategy Shares | ARK Fintech vs. Freedom Day Dividend | ARK Fintech vs. Franklin Templeton ETF | ARK Fintech vs. iShares MSCI China |
| Dimensional ETF vs. Vert Global Sustainable | Dimensional ETF vs. First Trust Exchange Traded | Dimensional ETF vs. VanEck Mortgage REIT | Dimensional ETF vs. Vanguard Global ex US |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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