Correlation Between Dimensional Retirement and Pioneer Select

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

By analyzing existing cross correlation between Dimensional Retirement Income and Pioneer Select Mid, you can compare the effects of market volatilities on Dimensional Retirement and Pioneer Select 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 Retirement with a short position of Pioneer Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Retirement and Pioneer Select.

Diversification Opportunities for Dimensional Retirement and Pioneer Select

0.6

Correlation Coefficient

Dimensional Retirement  Pioneer Select

Poor diversification

The 3 months correlation between Dimensional and Pioneer is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Retirement Income and Pioneer Select Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Select Mid and Dimensional Retirement 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 Retirement Income are associated (or correlated) with Pioneer Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Select Mid has no effect on the direction of Dimensional Retirement i.e., Dimensional Retirement and Pioneer Select go up and down completely randomly.

Pair Corralation between Dimensional Retirement and Pioneer Select

Assuming the 90 days horizon Dimensional Retirement Income is expected to generate 0.15 times more return on investment than Pioneer Select. However, Dimensional Retirement Income is 6.71 times less risky than Pioneer Select. It trades about 0.08 of its potential returns per unit of risk. Pioneer Select Mid is currently generating about -0.06 per unit of risk. If you would invest  1,157  in Dimensional Retirement Income on December 2, 2024 and sell it today you would earn a total of  12.00  from holding Dimensional Retirement Income or generate 1.04% return on investment over 90 days.

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

Dimensional Retirement Income  vs.  Pioneer Select Mid

Dimensional Retirement

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional Retirement Income are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Dimensional Retirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pioneer Select Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pioneer Select Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Pioneer Select 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 Retirement and Pioneer Select

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

The idea behind Dimensional Retirement Income and Pioneer Select Mid 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.