Correlation Between Focused International and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Focused International and Dodge Cox 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 Focused International and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focused International Growth and Dodge Cox Stock, you can compare the effects of market volatilities on Focused International and Dodge Cox 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 Focused International with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focused International and Dodge Cox.
Diversification Opportunities for Focused International and Dodge Cox
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Focused and Dodge is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Focused International Growth and Dodge Cox Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Stock and Focused 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 Focused International Growth are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox Stock has no effect on the direction of Focused International i.e., Focused International and Dodge Cox go up and down completely randomly.
Pair Corralation between Focused International and Dodge Cox
Assuming the 90 days horizon Focused International Growth is expected to generate 1.56 times more return on investment than Dodge Cox. However, Focused International is 1.56 times more volatile than Dodge Cox Stock. It trades about 0.14 of its potential returns per unit of risk. Dodge Cox Stock is currently generating about -0.17 per unit of risk. If you would invest 1,709 in Focused International Growth on September 13, 2024 and sell it today you would earn a total of 37.00 from holding Focused International Growth or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Focused International Growth vs. Dodge Cox Stock
Performance |
| Timeline |
| Focused International |
| Dodge Cox Stock |
Focused International and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focused International and Dodge Cox
The main advantage of trading using opposite Focused International and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focused International position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Focused International vs. The Gabelli Healthcare | Focused International vs. Lord Abbett Health | Focused International vs. Highland Longshort Healthcare | Focused International vs. Eventide Healthcare Life |
| Dodge Cox vs. Morningstar Unconstrained Allocation | Dodge Cox vs. Aqr Large Cap | Dodge Cox vs. Fisher Large Cap |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |