Correlation Between Dimensional Core and Schwab Large
Can any of the company-specific risk be diversified away by investing in both Dimensional Core and Schwab Large 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 Schwab Large 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 Schwab Large Cap ETF, you can compare the effects of market volatilities on Dimensional Core and Schwab Large 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 Schwab Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Core and Schwab Large.
Diversification Opportunities for Dimensional Core and Schwab Large
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dimensional and Schwab is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Core Equity and Schwab Large Cap ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Large Cap 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 Schwab Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Large Cap has no effect on the direction of Dimensional Core i.e., Dimensional Core and Schwab Large go up and down completely randomly.
Pair Corralation between Dimensional Core and Schwab Large
Given the investment horizon of 90 days Dimensional Core is expected to generate 1.15 times less return on investment than Schwab Large. But when comparing it to its historical volatility, Dimensional Core Equity is 1.01 times less risky than Schwab Large. It trades about 0.1 of its potential returns per unit of risk. Schwab Large Cap ETF is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,543 in Schwab Large Cap ETF on September 3, 2025 and sell it today you would earn a total of 144.00 from holding Schwab Large Cap ETF or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Dimensional Core Equity vs. Schwab Large Cap ETF
Performance |
| Timeline |
| Dimensional Core Equity |
| Schwab Large Cap |
Dimensional Core and Schwab Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional Core and Schwab Large
The main advantage of trading using opposite Dimensional Core and Schwab Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Core position performs unexpectedly, Schwab Large 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 Schwab Large will offset losses from the drop in Schwab Large's long position.| Dimensional Core vs. Strategy Shares | Dimensional Core vs. Freedom Day Dividend | Dimensional Core vs. Franklin Templeton ETF | Dimensional Core vs. iShares MSCI China |
| Schwab Large vs. FT Vest Equity | Schwab Large vs. Northern Lights | Schwab Large vs. Diamond Hill Funds | Schwab Large vs. Dimensional International High |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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