Correlation Between Dimensional Core and Avantis International
Can any of the company-specific risk be diversified away by investing in both Dimensional Core and Avantis International 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 Avantis International 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 Avantis International Equity, you can compare the effects of market volatilities on Dimensional Core and Avantis International 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 Avantis International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Core and Avantis International.
Diversification Opportunities for Dimensional Core and Avantis International
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dimensional and Avantis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Core Equity and Avantis International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis International 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 Avantis International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis International has no effect on the direction of Dimensional Core i.e., Dimensional Core and Avantis International go up and down completely randomly.
Pair Corralation between Dimensional Core and Avantis International
Given the investment horizon of 90 days Dimensional Core Equity is expected to generate 1.12 times more return on investment than Avantis International. However, Dimensional Core is 1.12 times more volatile than Avantis International Equity. It trades about 0.11 of its potential returns per unit of risk. Avantis International Equity is currently generating about 0.1 per unit of risk. If you would invest 4,460 in Dimensional Core Equity on September 7, 2025 and sell it today you would earn a total of 240.00 from holding Dimensional Core Equity or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional Core Equity vs. Avantis International Equity
Performance |
| Timeline |
| Dimensional Core Equity |
| Avantis International |
Dimensional Core and Avantis International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional Core and Avantis International
The main advantage of trading using opposite Dimensional Core and Avantis International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Core position performs unexpectedly, Avantis International 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 Avantis International will offset losses from the drop in Avantis International'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 |
| Avantis International vs. Strategy Shares | Avantis International vs. Freedom Day Dividend | Avantis International vs. Franklin Templeton ETF | Avantis International vs. iShares MSCI China |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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