Correlation Between Cullen High and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Cullen High 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 Cullen High and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullen High Dividend and Dodge Cox Stock, you can compare the effects of market volatilities on Cullen High 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 Cullen High with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen High and Dodge Cox.
Diversification Opportunities for Cullen High and Dodge Cox
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cullen and Dodge is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cullen High Dividend 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 Cullen High 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 Cullen High Dividend 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 Cullen High i.e., Cullen High and Dodge Cox go up and down completely randomly.
Pair Corralation between Cullen High and Dodge Cox
Assuming the 90 days horizon Cullen High is expected to generate 1.61 times less return on investment than Dodge Cox. But when comparing it to its historical volatility, Cullen High Dividend is 1.15 times less risky than Dodge Cox. It trades about 0.1 of its potential returns per unit of risk. Dodge Cox Stock is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 25,399 in Dodge Cox Stock on September 1, 2024 and sell it today you would earn a total of 3,336 from holding Dodge Cox Stock or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Cullen High Dividend vs. Dodge Cox Stock
Performance |
| Timeline |
| Cullen High Dividend |
| Dodge Cox Stock |
Cullen High and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen High and Dodge Cox
The main advantage of trading using opposite Cullen High and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen High 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.| Cullen High vs. The Value Fund | Cullen High vs. Lazard Global Listed | Cullen High vs. Lazard International Strategic | Cullen High vs. Tcw Relative Value |
| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Balanced 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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