Correlation Between IShares MSCI and Dimensional Core
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Dimensional Core 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 IShares MSCI and Dimensional Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI China and Dimensional Core Equity, you can compare the effects of market volatilities on IShares MSCI and Dimensional Core 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 IShares MSCI with a short position of Dimensional Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Dimensional Core.
Diversification Opportunities for IShares MSCI and Dimensional Core
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Dimensional is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and Dimensional Core Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Core Equity and IShares MSCI 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 iShares MSCI China are associated (or correlated) with Dimensional Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Core Equity has no effect on the direction of IShares MSCI i.e., IShares MSCI and Dimensional Core go up and down completely randomly.
Pair Corralation between IShares MSCI and Dimensional Core
Given the investment horizon of 90 days iShares MSCI China is expected to generate 1.85 times more return on investment than Dimensional Core. However, IShares MSCI is 1.85 times more volatile than Dimensional Core Equity. It trades about 0.24 of its potential returns per unit of risk. Dimensional Core Equity is currently generating about 0.14 per unit of risk. If you would invest 5,747 in iShares MSCI China on June 4, 2025 and sell it today you would earn a total of 385.00 from holding iShares MSCI China or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI China vs. Dimensional Core Equity
Performance |
| Timeline |
| iShares MSCI China |
| Dimensional Core Equity |
IShares MSCI and Dimensional Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Dimensional Core
The main advantage of trading using opposite IShares MSCI and Dimensional Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Dimensional Core 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 Dimensional Core will offset losses from the drop in Dimensional Core's long position.| IShares MSCI vs. ABIVAX Socit Anonyme | IShares MSCI vs. Thrivent High Yield | IShares MSCI vs. Morningstar Unconstrained Allocation | IShares MSCI vs. Via Renewables |
| Dimensional Core vs. Dimensional Targeted Value | Dimensional Core vs. Dimensional World ex | Dimensional Core vs. Dimensional Small Cap | Dimensional Core vs. Dimensional Core Equity |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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