Correlation Between Vanguard Utilities and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Utilities and Dimensional ETF 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 Vanguard Utilities and Dimensional ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Utilities Index and Dimensional ETF Trust, you can compare the effects of market volatilities on Vanguard Utilities and Dimensional ETF 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 Vanguard Utilities with a short position of Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Utilities and Dimensional ETF.
Diversification Opportunities for Vanguard Utilities and Dimensional ETF
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Dimensional is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Utilities Index and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust and Vanguard Utilities 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 Vanguard Utilities Index are associated (or correlated) with Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of Vanguard Utilities i.e., Vanguard Utilities and Dimensional ETF go up and down completely randomly.
Pair Corralation between Vanguard Utilities and Dimensional ETF
Considering the 90-day investment horizon Vanguard Utilities Index is expected to generate 1.26 times more return on investment than Dimensional ETF. However, Vanguard Utilities is 1.26 times more volatile than Dimensional ETF Trust. It trades about 0.03 of its potential returns per unit of risk. Dimensional ETF Trust is currently generating about 0.03 per unit of risk. If you would invest 18,308 in Vanguard Utilities Index on September 11, 2025 and sell it today you would earn a total of 256.00 from holding Vanguard Utilities Index or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Utilities Index vs. Dimensional ETF Trust
Performance |
| Timeline |
| Vanguard Utilities Index |
| Dimensional ETF Trust |
Vanguard Utilities and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Utilities and Dimensional ETF
The main advantage of trading using opposite Vanguard Utilities and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Utilities position performs unexpectedly, Dimensional ETF 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 ETF will offset losses from the drop in Dimensional ETF's long position.| Vanguard Utilities vs. Vanguard Utilities Index | Vanguard Utilities vs. Vanguard Energy Index | Vanguard Utilities vs. Vanguard Energy Index | Vanguard Utilities vs. Vanguard Consumer Staples |
| Dimensional ETF vs. Dimensional Core Equity | Dimensional ETF vs. Avantis Equity ETF | Dimensional ETF vs. Vanguard Russell 1000 | Dimensional ETF vs. Avantis International 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |