Correlation Between Emerging Markets and Dimensional 2055
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Dimensional 2055 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 Emerging Markets and Dimensional 2055 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Small and Dimensional 2055 Target, you can compare the effects of market volatilities on Emerging Markets and Dimensional 2055 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 Emerging Markets with a short position of Dimensional 2055. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Dimensional 2055.
Diversification Opportunities for Emerging Markets and Dimensional 2055
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Emerging and Dimensional is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Small and Dimensional 2055 Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional 2055 Target and Emerging Markets 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 Emerging Markets Small are associated (or correlated) with Dimensional 2055. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional 2055 Target has no effect on the direction of Emerging Markets i.e., Emerging Markets and Dimensional 2055 go up and down completely randomly.
Pair Corralation between Emerging Markets and Dimensional 2055
Assuming the 90 days horizon Emerging Markets Small is expected to generate 0.91 times more return on investment than Dimensional 2055. However, Emerging Markets Small is 1.09 times less risky than Dimensional 2055. It trades about 0.25 of its potential returns per unit of risk. Dimensional 2055 Target is currently generating about 0.17 per unit of risk. If you would invest 2,457 in Emerging Markets Small on March 22, 2025 and sell it today you would earn a total of 70.00 from holding Emerging Markets Small or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Small vs. Dimensional 2055 Target
Performance |
| Timeline |
| Emerging Markets Small |
| Dimensional 2055 Target |
Emerging Markets and Dimensional 2055 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Dimensional 2055
The main advantage of trading using opposite Emerging Markets and Dimensional 2055 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Dimensional 2055 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 2055 will offset losses from the drop in Dimensional 2055's long position.| Emerging Markets vs. Artisan High Income | Emerging Markets vs. Ab Bond Inflation | Emerging Markets vs. Ab Bond Inflation | Emerging Markets vs. Ab Bond Inflation |
| Dimensional 2055 vs. Shelton Emerging Markets | Dimensional 2055 vs. Pace International Emerging | Dimensional 2055 vs. Aqr Diversified Arbitrage | Dimensional 2055 vs. The Hartford Emerging |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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