Correlation Between Dodge Cox and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Dunham Emerging 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 Dodge Cox and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Cox Emerging and Dunham Emerging Markets, you can compare the effects of market volatilities on Dodge Cox and Dunham Emerging 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 Dodge Cox with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Dunham Emerging.
Diversification Opportunities for Dodge Cox and Dunham Emerging
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Dunham is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and Dunham Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Emerging Markets and Dodge Cox 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 Dodge Cox Emerging are associated (or correlated) with Dunham Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Emerging Markets has no effect on the direction of Dodge Cox i.e., Dodge Cox and Dunham Emerging go up and down completely randomly.
Pair Corralation between Dodge Cox and Dunham Emerging
Assuming the 90 days horizon Dodge Cox Emerging is expected to generate 0.94 times more return on investment than Dunham Emerging. However, Dodge Cox Emerging is 1.06 times less risky than Dunham Emerging. It trades about 0.06 of its potential returns per unit of risk. Dunham Emerging Markets is currently generating about -0.06 per unit of risk. If you would invest 900.00 in Dodge Cox Emerging on December 1, 2024 and sell it today you would earn a total of 10.00 from holding Dodge Cox Emerging or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dodge Cox Emerging vs. Dunham Emerging Markets
Performance |
| Timeline |
| Dodge Cox Emerging |
| Dunham Emerging Markets |
Dodge Cox and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Dunham Emerging
The main advantage of trading using opposite Dodge Cox and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Dunham Emerging 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 Dunham Emerging will offset losses from the drop in Dunham Emerging's long position.| Dodge Cox vs. John Hancock Financial | Dodge Cox vs. Icon Financial Fund | Dodge Cox vs. Fidelity Advisor Financial | Dodge Cox vs. Rmb Mendon Financial |
| Dunham Emerging vs. College Retirement Equities | Dunham Emerging vs. Tiaa Cref Lifestyle Moderate | Dunham Emerging vs. Dimensional Retirement Income | Dunham Emerging vs. Jp Morgan Smartretirement |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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