Correlation Between Dimensional ETF and Global X
Can any of the company-specific risk be diversified away by investing in both Dimensional ETF and Global X 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 Global X 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 Global X Interest, you can compare the effects of market volatilities on Dimensional ETF and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional ETF and Global X.
Diversification Opportunities for Dimensional ETF and Global X
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dimensional and Global is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional ETF Trust and Global X Interest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Interest 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Interest has no effect on the direction of Dimensional ETF i.e., Dimensional ETF and Global X go up and down completely randomly.
Pair Corralation between Dimensional ETF and Global X
Given the investment horizon of 90 days Dimensional ETF Trust is expected to generate 0.8 times more return on investment than Global X. However, Dimensional ETF Trust is 1.25 times less risky than Global X. It trades about 0.11 of its potential returns per unit of risk. Global X Interest is currently generating about 0.04 per unit of risk. If you would invest 4,112 in Dimensional ETF Trust on December 1, 2024 and sell it today you would earn a total of 79.00 from holding Dimensional ETF Trust or generate 1.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dimensional ETF Trust vs. Global X Interest
Performance |
Timeline |
Dimensional ETF Trust |
Global X Interest |
Dimensional ETF and Global X Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dimensional ETF and Global X
The main advantage of trading using opposite Dimensional ETF and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional ETF position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional Core Equity |
Global X vs. Global X Emerging | Global X vs. Global X SP | Global X vs. Global X AgTech | Global X vs. Global X Wind |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |