Correlation Between Dimensional Core and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both Dimensional Core and Pacer Funds 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 Core and Pacer Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional Core Equity and Pacer Funds Trust, you can compare the effects of market volatilities on Dimensional Core and Pacer Funds 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 Core with a short position of Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Core and Pacer Funds.
Diversification Opportunities for Dimensional Core and Pacer Funds
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Dimensional and Pacer is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Core Equity and Pacer Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Funds Trust and Dimensional Core 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 Core Equity are associated (or correlated) with Pacer Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Funds Trust has no effect on the direction of Dimensional Core i.e., Dimensional Core and Pacer Funds go up and down completely randomly.
Pair Corralation between Dimensional Core and Pacer Funds
Given the investment horizon of 90 days Dimensional Core is expected to generate 1.51 times less return on investment than Pacer Funds. In addition to that, Dimensional Core is 1.02 times more volatile than Pacer Funds Trust. It trades about 0.04 of its total potential returns per unit of risk. Pacer Funds Trust is currently generating about 0.06 per unit of volatility. If you would invest 3,675 in Pacer Funds Trust on March 15, 2025 and sell it today you would earn a total of 233.00 from holding Pacer Funds Trust or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Dimensional Core Equity vs. Pacer Funds Trust
Performance |
| Timeline |
| Dimensional Core Equity |
| Pacer Funds Trust |
Dimensional Core and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional Core and Pacer Funds
The main advantage of trading using opposite Dimensional Core and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Core position performs unexpectedly, Pacer Funds 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 Pacer Funds will offset losses from the drop in Pacer Funds' long position.| Dimensional Core vs. Dimensional Targeted Value | Dimensional Core vs. Dimensional World ex | Dimensional Core vs. Dimensional Small Cap | Dimensional Core vs. Dimensional Core Equity |
| Pacer Funds vs. Pacer Lunt Large | Pacer Funds vs. Pacer Developed Markets | Pacer Funds vs. Pacer Lunt Large | Pacer Funds vs. Pacer Small Cap |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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