Correlation Between Dimensional ETF and ProShares Hedge
Can any of the company-specific risk be diversified away by investing in both Dimensional ETF and ProShares Hedge 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 ETF and ProShares Hedge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional ETF Trust and ProShares Hedge Replication, you can compare the effects of market volatilities on Dimensional ETF and ProShares Hedge 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 ETF with a short position of ProShares Hedge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional ETF and ProShares Hedge.
Diversification Opportunities for Dimensional ETF and ProShares Hedge
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dimensional and ProShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional ETF Trust and ProShares Hedge Replication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Hedge Repl and Dimensional ETF 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 ETF Trust are associated (or correlated) with ProShares Hedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Hedge Repl has no effect on the direction of Dimensional ETF i.e., Dimensional ETF and ProShares Hedge go up and down completely randomly.
Pair Corralation between Dimensional ETF and ProShares Hedge
Given the investment horizon of 90 days Dimensional ETF Trust is expected to generate 2.49 times more return on investment than ProShares Hedge. However, Dimensional ETF is 2.49 times more volatile than ProShares Hedge Replication. It trades about 0.34 of its potential returns per unit of risk. ProShares Hedge Replication is currently generating about 0.33 per unit of risk. If you would invest 2,591 in Dimensional ETF Trust on April 19, 2025 and sell it today you would earn a total of 457.00 from holding Dimensional ETF Trust or generate 17.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional ETF Trust vs. ProShares Hedge Replication
Performance |
| Timeline |
| Dimensional ETF Trust |
| ProShares Hedge Repl |
Dimensional ETF and ProShares Hedge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional ETF and ProShares Hedge
The main advantage of trading using opposite Dimensional ETF and ProShares Hedge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional ETF position performs unexpectedly, ProShares Hedge 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 ProShares Hedge will offset losses from the drop in ProShares Hedge's long position.| Dimensional ETF vs. Vanguard FTSE Emerging | Dimensional ETF vs. iShares Core MSCI | Dimensional ETF vs. Global X Funds | Dimensional ETF vs. iShares MSCI Emerging |
| ProShares Hedge vs. ProShares Merger ETF | ProShares Hedge vs. IQ Hedge Multi Strategy | ProShares Hedge vs. ProShares Large Cap | ProShares Hedge vs. IQ Merger Arbitrage |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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