Correlation Between Starboard Investment and Dimensional ETF

Can any of the company-specific risk be diversified away by investing in both Starboard Investment 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 Starboard Investment and Dimensional ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Starboard Investment Trust and Dimensional ETF Trust, you can compare the effects of market volatilities on Starboard Investment 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 Starboard Investment with a short position of Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starboard Investment and Dimensional ETF.

Diversification Opportunities for Starboard Investment and Dimensional ETF

0.65

Correlation Coefficient

Starboard Investment  Dimensional ETF

Poor diversification

The 3 months correlation between Starboard and Dimensional is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Starboard Investment Trust 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 Starboard Investment 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 Starboard Investment Trust 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 Starboard Investment i.e., Starboard Investment and Dimensional ETF go up and down completely randomly.

Pair Corralation between Starboard Investment and Dimensional ETF

Given the investment horizon of 90 days Starboard Investment Trust is expected to generate about the same return on investment as Dimensional ETF Trust. However, Starboard Investment is 1.88 times more volatile than Dimensional ETF Trust. It trades about -0.07 of its potential returns per unit of risk. Dimensional ETF Trust is currently producing about -0.14 per unit of risk. If you would invest  4,146  in Dimensional ETF Trust on October 4, 2024 and sell it today you would lose (94.00) from holding Dimensional ETF Trust or give up 2.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Starboard Investment Trust  vs.  Dimensional ETF Trust

Starboard Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Starboard Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Starboard Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dimensional ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dimensional ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Dimensional ETF is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Starboard Investment and Dimensional ETF

The main advantage of trading using opposite Starboard Investment and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starboard Investment 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.

The idea behind Starboard Investment Trust and Dimensional ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.