Correlation Between Dimensional 2055 and International Core

Can any of the company-specific risk be diversified away by investing in both Dimensional 2055 and International Core 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 2055 and International Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dimensional 2055 Target and International E Equity, you can compare the effects of market volatilities on Dimensional 2055 and International Core 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 2055 with a short position of International Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional 2055 and International Core.

Diversification Opportunities for Dimensional 2055 and International Core

0.97

Correlation Coefficient

Dimensional 2055  International Core

Almost no diversification

The 3 months correlation between Dimensional and International is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional 2055 Target and International E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International E Equity and Dimensional 2055 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 2055 Target are associated (or correlated) with International Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International E Equity has no effect on the direction of Dimensional 2055 i.e., Dimensional 2055 and International Core go up and down completely randomly.

Pair Corralation between Dimensional 2055 and International Core

Assuming the 90 days horizon Dimensional 2055 Target is expected to generate 0.92 times more return on investment than International Core. However, Dimensional 2055 Target is 1.08 times less risky than International Core. It trades about 0.22 of its potential returns per unit of risk. International E Equity is currently generating about 0.15 per unit of risk. If you would invest  1,933  in Dimensional 2055 Target on May 3, 2025 and sell it today you would earn a total of  172.00  from holding Dimensional 2055 Target or generate 8.9% return on investment over 90 days.

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

Dimensional 2055 Target  vs.  International E Equity

Dimensional 2055 Target

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional 2055 Target are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Dimensional 2055 may actually be approaching a critical reversion point that can send shares even higher in September 2025.

International E Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International E Equity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, International Core may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dimensional 2055 and International Core

The main advantage of trading using opposite Dimensional 2055 and International Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional 2055 position performs unexpectedly, International Core 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 International Core will offset losses from the drop in International Core's long position.

The idea behind Dimensional 2055 Target and International E Equity 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.