Correlation Between Dimensional ETF and Vanguard Utilities
Can any of the company-specific risk be diversified away by investing in both Dimensional ETF and Vanguard Utilities 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 Vanguard Utilities 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 Vanguard Utilities Index, you can compare the effects of market volatilities on Dimensional ETF and Vanguard Utilities 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 Vanguard Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional ETF and Vanguard Utilities.
Diversification Opportunities for Dimensional ETF and Vanguard Utilities
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dimensional and Vanguard is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional ETF Trust and Vanguard Utilities Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Utilities Index 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 Vanguard Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Utilities Index has no effect on the direction of Dimensional ETF i.e., Dimensional ETF and Vanguard Utilities go up and down completely randomly.
Pair Corralation between Dimensional ETF and Vanguard Utilities
Given the investment horizon of 90 days Dimensional ETF is expected to generate 2.78 times less return on investment than Vanguard Utilities. But when comparing it to its historical volatility, Dimensional ETF Trust is 1.2 times less risky than Vanguard Utilities. It trades about 0.05 of its potential returns per unit of risk. Vanguard Utilities Index is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9,220 in Vanguard Utilities Index on August 21, 2025 and sell it today you would earn a total of 502.00 from holding Vanguard Utilities Index or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Dimensional ETF Trust vs. Vanguard Utilities Index
Performance |
| Timeline |
| Dimensional ETF Trust |
| Vanguard Utilities Index |
Dimensional ETF and Vanguard Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional ETF and Vanguard Utilities
The main advantage of trading using opposite Dimensional ETF and Vanguard Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional ETF position performs unexpectedly, Vanguard Utilities 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 Vanguard Utilities will offset losses from the drop in Vanguard Utilities' long position.| Dimensional ETF vs. Vanguard Total Stock | Dimensional ETF vs. SPDR SP 500 | Dimensional ETF vs. iShares Core SP | Dimensional ETF vs. Vanguard Dividend Appreciation |
| Vanguard Utilities vs. Vanguard Utilities Index | Vanguard Utilities vs. Vanguard Energy Index | Vanguard Utilities vs. Vanguard Energy Index | Vanguard Utilities vs. Vanguard Consumer Staples |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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