Correlation Between Dimensional 2035 and Dfa Emerging

Can any of the company-specific risk be diversified away by investing in both Dimensional 2035 and Dfa Emerging 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 2035 and Dfa Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dimensional 2035 Target and Dfa Emerging Markets, you can compare the effects of market volatilities on Dimensional 2035 and Dfa Emerging 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 2035 with a short position of Dfa Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional 2035 and Dfa Emerging.

Diversification Opportunities for Dimensional 2035 and Dfa Emerging

0.89

Correlation Coefficient

Dimensional 2035  Dfa Emerging

Very poor diversification

The 3 months correlation between Dimensional and Dfa is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional 2035 Target and Dfa Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Emerging Markets and Dimensional 2035 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 2035 Target are associated (or correlated) with Dfa Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Emerging Markets has no effect on the direction of Dimensional 2035 i.e., Dimensional 2035 and Dfa Emerging go up and down completely randomly.

Pair Corralation between Dimensional 2035 and Dfa Emerging

Assuming the 90 days horizon Dimensional 2035 is expected to generate 2.26 times less return on investment than Dfa Emerging. But when comparing it to its historical volatility, Dimensional 2035 Target is 1.56 times less risky than Dfa Emerging. It trades about 0.21 of its potential returns per unit of risk. Dfa Emerging Markets is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  1,476  in Dfa Emerging Markets on April 30, 2025 and sell it today you would earn a total of  211.00  from holding Dfa Emerging Markets or generate 14.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Dimensional 2035 Target  vs.  Dfa Emerging Markets

Dimensional 2035 Target

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional 2035 Target are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Dimensional 2035 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dfa Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa Emerging Markets are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dfa Emerging showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dimensional 2035 and Dfa Emerging

The main advantage of trading using opposite Dimensional 2035 and Dfa Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional 2035 position performs unexpectedly, Dfa Emerging 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 Dfa Emerging will offset losses from the drop in Dfa Emerging's long position.

The idea behind Dimensional 2035 Target and Dfa Emerging Markets 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.