Correlation Between Dimensional ETF and Stance Sustainable

Can any of the company-specific risk be diversified away by investing in both Dimensional ETF and Stance Sustainable 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 Stance Sustainable 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 Stance Sustainable Beta, you can compare the effects of market volatilities on Dimensional ETF and Stance Sustainable 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 Stance Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional ETF and Stance Sustainable.

Diversification Opportunities for Dimensional ETF and Stance Sustainable

0.51

Correlation Coefficient

Dimensional ETF  Stance Sustainable

Very weak diversification

The 3 months correlation between Dimensional and Stance is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional ETF Trust and Stance Sustainable Beta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stance Sustainable Beta 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 Stance Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stance Sustainable Beta has no effect on the direction of Dimensional ETF i.e., Dimensional ETF and Stance Sustainable go up and down completely randomly.

Pair Corralation between Dimensional ETF and Stance Sustainable

Given the investment horizon of 90 days Dimensional ETF Trust is expected to under-perform the Stance Sustainable. But the etf apears to be less risky and, when comparing its historical volatility, Dimensional ETF Trust is 1.07 times less risky than Stance Sustainable. The etf trades about -0.01 of its potential returns per unit of risk. The Stance Sustainable Beta is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,478  in Stance Sustainable Beta on October 23, 2024 and sell it today you would earn a total of  54.00  from holding Stance Sustainable Beta or generate 2.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	70.49%
Values	Daily Returns

Dimensional ETF Trust  vs.  Stance Sustainable Beta

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. In spite of fairly stable basic indicators, Dimensional ETF is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Stance Sustainable Beta

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stance Sustainable Beta are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Stance Sustainable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dimensional ETF and Stance Sustainable

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

The idea behind Dimensional ETF Trust and Stance Sustainable Beta 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.