Correlation Between Dodge Cox and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Fidelity Advisor 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 Fidelity Advisor 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 Fidelity Advisor Freedom, you can compare the effects of market volatilities on Dodge Cox and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Fidelity Advisor.
Diversification Opportunities for Dodge Cox and Fidelity Advisor
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dodge and Fidelity is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and Fidelity Advisor Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Freedom 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Freedom has no effect on the direction of Dodge Cox i.e., Dodge Cox and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Dodge Cox and Fidelity Advisor
Assuming the 90 days horizon Dodge Cox Emerging is expected to under-perform the Fidelity Advisor. In addition to that, Dodge Cox is 1.12 times more volatile than Fidelity Advisor Freedom. It trades about -0.16 of its total potential returns per unit of risk. Fidelity Advisor Freedom is currently generating about 0.24 per unit of volatility. If you would invest 1,476 in Fidelity Advisor Freedom on September 1, 2024 and sell it today you would earn a total of 45.00 from holding Fidelity Advisor Freedom or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Emerging vs. Fidelity Advisor Freedom
Performance |
| Timeline |
| Dodge Cox Emerging |
| Fidelity Advisor Freedom |
Dodge Cox and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Fidelity Advisor
The main advantage of trading using opposite Dodge Cox and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Dodge Cox vs. Adams Diversified Equity | Dodge Cox vs. Delaware Limited Term Diversified | Dodge Cox vs. Fidelity Advisor Diversified | Dodge Cox vs. American Century Diversified |
| Fidelity Advisor vs. Sp Midcap Index | Fidelity Advisor vs. Western Asset Diversified | Fidelity Advisor vs. Artisan Emerging Markets | Fidelity Advisor vs. Rbc Emerging Markets |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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