Correlation Between Appleseed Fund and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Appleseed Fund 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 Appleseed Fund and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appleseed Fund Appleseed and Dodge Cox Stock, you can compare the effects of market volatilities on Appleseed Fund 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 Appleseed Fund with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appleseed Fund and Dodge Cox.
Diversification Opportunities for Appleseed Fund and Dodge Cox
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Appleseed and Dodge is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Appleseed Fund Appleseed 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 Appleseed Fund 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 Appleseed Fund Appleseed 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 Appleseed Fund i.e., Appleseed Fund and Dodge Cox go up and down completely randomly.
Pair Corralation between Appleseed Fund and Dodge Cox
Assuming the 90 days horizon Appleseed Fund is expected to generate 1.15 times less return on investment than Dodge Cox. But when comparing it to its historical volatility, Appleseed Fund Appleseed is 1.58 times less risky than Dodge Cox. It trades about 0.47 of its potential returns per unit of risk. Dodge Cox Stock is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 25,438 in Dodge Cox Stock on October 20, 2024 and sell it today you would earn a total of 1,234 from holding Dodge Cox Stock or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appleseed Fund Appleseed vs. Dodge Cox Stock
Performance |
| Timeline |
| Appleseed Fund Appleseed |
| Dodge Cox Stock |
Appleseed Fund and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appleseed Fund and Dodge Cox
The main advantage of trading using opposite Appleseed Fund and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appleseed Fund 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.| Appleseed Fund vs. Appleseed Fund Appleseed | Appleseed Fund vs. Timothy Plan High | Appleseed Fund vs. Blackrock High Yield | Appleseed Fund vs. Virtus Multi Sector Short |
| Dodge Cox vs. Tax Managed Large Cap | Dodge Cox vs. L Abbett Fundamental | Dodge Cox vs. Rbb Fund | Dodge Cox vs. Ab Small 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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