Correlation Between Dimensional International and SPDR MSCI

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

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

Diversification Opportunities for Dimensional International and SPDR MSCI

0.89

Correlation Coefficient

Dimensional International  SPDR MSCI

Very poor diversification

The 3 months correlation between Dimensional and SPDR is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional International Core and SPDR MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI EAFE and Dimensional International 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 International Core are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI EAFE has no effect on the direction of Dimensional International i.e., Dimensional International and SPDR MSCI go up and down completely randomly.

Pair Corralation between Dimensional International and SPDR MSCI

Given the investment horizon of 90 days Dimensional International Core is expected to generate 0.86 times more return on investment than SPDR MSCI. However, Dimensional International Core is 1.16 times less risky than SPDR MSCI. It trades about 0.22 of its potential returns per unit of risk. SPDR MSCI EAFE is currently generating about 0.11 per unit of risk. If you would invest  2,988  in Dimensional International Core on May 28, 2025 and sell it today you would earn a total of  283.00  from holding Dimensional International Core or generate 9.47% return on investment over 90 days.

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

Dimensional International Core  vs.  SPDR MSCI EAFE

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 16 (%) 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.

SPDR MSCI EAFE

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR MSCI EAFE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, SPDR MSCI 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 International and SPDR MSCI

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

The idea behind Dimensional International Core and SPDR MSCI EAFE 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.