Correlation Between SPDR Portfolio and Dimensional ETF

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

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

Diversification Opportunities for SPDR Portfolio and Dimensional ETF

0.0

Correlation Coefficient

SPDR Portfolio  Dimensional ETF

Pay attention - limited upside

The 3 months correlation between SPDR and Dimensional is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Emerging and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust and SPDR Portfolio 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 SPDR Portfolio Emerging are associated (or correlated) with Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and Dimensional ETF go up and down completely randomly.

Pair Corralation between SPDR Portfolio and Dimensional ETF

If you would invest  3,849  in SPDR Portfolio Emerging on June 30, 2024 and sell it today you would earn a total of  317.00  from holding SPDR Portfolio Emerging or generate 8.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SPDR Portfolio Emerging  vs.  Dimensional ETF Trust

SPDR Portfolio Emerging

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Portfolio Emerging are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, SPDR Portfolio may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Dimensional ETF Trust

Risk-Adjusted Performance

0 of 100

Modest

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 technical and fundamental indicators, Dimensional ETF is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SPDR Portfolio and Dimensional ETF

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

The idea behind SPDR Portfolio Emerging and Dimensional ETF Trust 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.