Correlation Between Valued Advisers and Dimensional Global

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

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

Diversification Opportunities for Valued Advisers and Dimensional Global

-0.08

Correlation Coefficient

Valued Advisers  Dimensional Global

Good diversification

The 3 months correlation between Valued and Dimensional is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Valued Advisers Trust and Dimensional Global Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Global Core and Valued Advisers 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 Valued Advisers Trust are associated (or correlated) with Dimensional Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Global Core has no effect on the direction of Valued Advisers i.e., Valued Advisers and Dimensional Global go up and down completely randomly.

Pair Corralation between Valued Advisers and Dimensional Global

Given the investment horizon of 90 days Valued Advisers is expected to generate 3.84 times less return on investment than Dimensional Global. But when comparing it to its historical volatility, Valued Advisers Trust is 1.85 times less risky than Dimensional Global. It trades about 0.01 of its potential returns per unit of risk. Dimensional Global Core is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  5,279  in Dimensional Global Core on September 20, 2024 and sell it today you would earn a total of  8.00  from holding Dimensional Global Core or generate 0.15% return on investment over 90 days.

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

Valued Advisers Trust  vs.  Dimensional Global Core

Valued Advisers Trust

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Valued Advisers Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Valued Advisers is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Dimensional Global Core

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dimensional Global Core has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Dimensional Global 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 Valued Advisers and Dimensional Global

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

The idea behind Valued Advisers Trust and Dimensional Global Core 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.