Correlation Between Dimensional ETF and Dimensional International

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

Diversification Opportunities for Dimensional ETF and Dimensional International

0.93

Correlation Coefficient

Dimensional ETF  Dimensional International

Almost no diversification

The 3 months correlation between Dimensional and Dimensional is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional ETF Trust and Dimensional International Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional International 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 Dimensional International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional International has no effect on the direction of Dimensional ETF i.e., Dimensional ETF and Dimensional International go up and down completely randomly.

Pair Corralation between Dimensional ETF and Dimensional International

Given the investment horizon of 90 days Dimensional ETF is expected to generate 1.03 times less return on investment than Dimensional International. In addition to that, Dimensional ETF is 1.04 times more volatile than Dimensional International Core. It trades about 0.19 of its total potential returns per unit of risk. Dimensional International Core is currently generating about 0.2 per unit of volatility. If you would invest  2,960  in Dimensional International Core on May 18, 2025 and sell it today you would earn a total of  267.00  from holding Dimensional International Core or generate 9.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Dimensional ETF Trust  vs.  Dimensional International Core

Dimensional ETF Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional ETF Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Dimensional ETF may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Dimensional International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional International Core are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating forward indicators, Dimensional International may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dimensional ETF and Dimensional International

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

The idea behind Dimensional ETF Trust and Dimensional International 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.