Correlation Between Dimensional 2025 and Dfa International
Can any of the company-specific risk be diversified away by investing in both Dimensional 2025 and Dfa 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 2025 and Dfa International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional 2025 Target and Dfa International Value, you can compare the effects of market volatilities on Dimensional 2025 and Dfa 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 2025 with a short position of Dfa International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional 2025 and Dfa International.
Diversification Opportunities for Dimensional 2025 and Dfa International
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dimensional and Dfa is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional 2025 Target and Dfa International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa International Value and Dimensional 2025 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 2025 Target are associated (or correlated) with Dfa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa International Value has no effect on the direction of Dimensional 2025 i.e., Dimensional 2025 and Dfa International go up and down completely randomly.
Pair Corralation between Dimensional 2025 and Dfa International
Assuming the 90 days horizon Dimensional 2025 is expected to generate 2.4 times less return on investment than Dfa International. But when comparing it to its historical volatility, Dimensional 2025 Target is 2.39 times less risky than Dfa International. It trades about 0.2 of its potential returns per unit of risk. Dfa International Value is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,411 in Dfa International Value on May 30, 2025 and sell it today you would earn a total of 236.00 from holding Dfa International Value or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Dimensional 2025 Target vs. Dfa International Value
Performance |
| Timeline |
| Dimensional 2025 Target |
| Dfa International Value |
Dimensional 2025 and Dfa International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional 2025 and Dfa International
The main advantage of trading using opposite Dimensional 2025 and Dfa International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional 2025 position performs unexpectedly, Dfa 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 Dfa International will offset losses from the drop in Dfa International's long position.| Dimensional 2025 vs. World Core Equity | Dimensional 2025 vs. Dfa International | Dimensional 2025 vs. Dimensional 2045 Target | Dimensional 2025 vs. Dimensional 2040 Target |
| Dfa International vs. Us Large Cap | Dfa International vs. Dfa International Small | Dfa International vs. International Small Pany | Dfa International vs. Dfa Five Year Global |
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.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |