Correlation Between Brandes E and Dodge International
Can any of the company-specific risk be diversified away by investing in both Brandes E and Dodge International 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 Brandes E and Dodge International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brandes E Plus and Dodge International Stock, you can compare the effects of market volatilities on Brandes E and Dodge International 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 Brandes E with a short position of Dodge International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes E and Dodge International.
Diversification Opportunities for Brandes E and Dodge International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brandes and Dodge is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Brandes E Plus and Dodge International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge International Stock and Brandes E 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 Brandes E Plus are associated (or correlated) with Dodge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge International Stock has no effect on the direction of Brandes E i.e., Brandes E and Dodge International go up and down completely randomly.
Pair Corralation between Brandes E and Dodge International
Assuming the 90 days horizon Brandes E is expected to generate 1.55 times less return on investment than Dodge International. But when comparing it to its historical volatility, Brandes E Plus is 2.33 times less risky than Dodge International. It trades about 0.06 of its potential returns per unit of risk. Dodge International Stock is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,807 in Dodge International Stock on September 12, 2024 and sell it today you would earn a total of 520.00 from holding Dodge International Stock or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandes E Plus vs. Dodge International Stock
Performance |
| Timeline |
| Brandes E Plus |
| Dodge International Stock |
Brandes E and Dodge International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes E and Dodge International
The main advantage of trading using opposite Brandes E and Dodge International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes E position performs unexpectedly, Dodge International 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 International will offset losses from the drop in Dodge International's long position.| Brandes E vs. Dodge International Stock | Brandes E vs. Rbc Global Equity | Brandes E vs. Us Vector Equity | Brandes E vs. Scharf Fund Retail |
| Dodge International vs. Dodge Stock Fund | Dodge International vs. Dodge Income Fund | Dodge International vs. Dodge Balanced Fund | Dodge International vs. The Fairholme Fund |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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