Correlation Between Dodge Cox and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Ep 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 Ep 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 Ep Emerging Markets, you can compare the effects of market volatilities on Dodge Cox and Ep 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 Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Ep Emerging.
Diversification Opportunities for Dodge Cox and Ep Emerging
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dodge and EPEIX is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep 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 Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Dodge Cox i.e., Dodge Cox and Ep Emerging go up and down completely randomly.
Pair Corralation between Dodge Cox and Ep Emerging
Assuming the 90 days horizon Dodge Cox Emerging is expected to generate 0.87 times more return on investment than Ep Emerging. However, Dodge Cox Emerging is 1.14 times less risky than Ep Emerging. It trades about -0.25 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about -0.28 per unit of risk. If you would invest 944.00 in Dodge Cox Emerging on August 29, 2024 and sell it today you would lose (36.00) from holding Dodge Cox Emerging or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dodge Cox Emerging vs. Ep Emerging Markets
Performance |
| Timeline |
| Dodge Cox Emerging |
| Ep Emerging Markets |
Dodge Cox and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Ep Emerging
The main advantage of trading using opposite Dodge Cox and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Ep 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.| Dodge Cox vs. Vanguard Emerging Markets | Dodge Cox vs. Vanguard Emerging Markets | Dodge Cox vs. HUMANA INC | Dodge Cox vs. Aquagold International |
| Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. HUMANA INC | Ep Emerging vs. Aquagold International |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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