Correlation Between Avantis Equity and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both Avantis Equity 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 Avantis Equity and Dimensional ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Equity ETF and Dimensional ETF Trust, you can compare the effects of market volatilities on Avantis Equity 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 Avantis Equity with a short position of Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Equity and Dimensional ETF.
Diversification Opportunities for Avantis Equity and Dimensional ETF
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Avantis and Dimensional is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Equity ETF 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 Avantis Equity 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 Avantis Equity ETF 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 Avantis Equity i.e., Avantis Equity and Dimensional ETF go up and down completely randomly.
Pair Corralation between Avantis Equity and Dimensional ETF
Given the investment horizon of 90 days Avantis Equity ETF is expected to generate 1.19 times more return on investment than Dimensional ETF. However, Avantis Equity is 1.19 times more volatile than Dimensional ETF Trust. It trades about 0.12 of its potential returns per unit of risk. Dimensional ETF Trust is currently generating about 0.1 per unit of risk. If you would invest 10,515 in Avantis Equity ETF on August 14, 2025 and sell it today you would earn a total of 580.00 from holding Avantis Equity ETF or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Equity ETF vs. Dimensional ETF Trust
Performance |
| Timeline |
| Avantis Equity ETF |
| Dimensional ETF Trust |
Avantis Equity and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Equity and Dimensional ETF
The main advantage of trading using opposite Avantis Equity and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Equity 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.| Avantis Equity vs. Avantis International Equity | Avantis Equity vs. Avantis International Small | Avantis Equity vs. Dimensional ETF Trust | Avantis Equity vs. Vanguard Utilities Index |
| Dimensional ETF vs. Dimensional Core Equity | Dimensional ETF vs. Avantis Equity ETF | Dimensional ETF vs. Vanguard Russell 1000 | Dimensional ETF vs. Avantis International Equity |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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