Correlation Between Dimensional International and Advisor Managed

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

By analyzing existing cross correlation between Dimensional International High and Advisor Managed Portfolios, you can compare the effects of market volatilities on Dimensional International and Advisor Managed 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 International with a short position of Advisor Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional International and Advisor Managed.

Diversification Opportunities for Dimensional International and Advisor Managed

-0.4

Correlation Coefficient

Dimensional International  Advisor Managed

Very good diversification

The 3 months correlation between Dimensional and Advisor is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional International High and Advisor Managed Portfolios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisor Managed Port and Dimensional International 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 International High are associated (or correlated) with Advisor Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisor Managed Port has no effect on the direction of Dimensional International i.e., Dimensional International and Advisor Managed go up and down completely randomly.

Pair Corralation between Dimensional International and Advisor Managed

Given the investment horizon of 90 days Dimensional International High is expected to generate 0.42 times more return on investment than Advisor Managed. However, Dimensional International High is 2.37 times less risky than Advisor Managed. It trades about 0.16 of its potential returns per unit of risk. Advisor Managed Portfolios is currently generating about -0.1 per unit of risk. If you would invest  2,515  in Dimensional International High on December 30, 2024 and sell it today you would earn a total of  197.00  from holding Dimensional International High or generate 7.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dimensional International High  vs.  Advisor Managed Portfolios

Dimensional International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional International High are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical indicators, Dimensional International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Advisor Managed Port

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advisor Managed Portfolios has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Etf's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with Dimensional International and Advisor Managed

The main advantage of trading using opposite Dimensional International and Advisor Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional International position performs unexpectedly, Advisor Managed 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 Advisor Managed will offset losses from the drop in Advisor Managed's long position.

The idea behind Dimensional International High and Advisor Managed Portfolios 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.