Correlation Between Dodge Cox and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Mainstay Moderate 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 Mainstay Moderate 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 Mainstay Moderate Growth, you can compare the effects of market volatilities on Dodge Cox and Mainstay Moderate 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 Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Mainstay Moderate.
Diversification Opportunities for Dodge Cox and Mainstay Moderate
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dodge and Mainstay is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and Mainstay Moderate Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate Growth 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 Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate Growth has no effect on the direction of Dodge Cox i.e., Dodge Cox and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Dodge Cox and Mainstay Moderate
Assuming the 90 days horizon Dodge Cox Emerging is expected to under-perform the Mainstay Moderate. In addition to that, Dodge Cox is 1.1 times more volatile than Mainstay Moderate Growth. It trades about -0.23 of its total potential returns per unit of risk. Mainstay Moderate Growth is currently generating about 0.36 per unit of volatility. If you would invest 1,630 in Mainstay Moderate Growth on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Mainstay Moderate Growth or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dodge Cox Emerging vs. Mainstay Moderate Growth
Performance |
| Timeline |
| Dodge Cox Emerging |
| Mainstay Moderate Growth |
Dodge Cox and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Mainstay Moderate
The main advantage of trading using opposite Dodge Cox and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Mainstay Moderate 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 Mainstay Moderate will offset losses from the drop in Mainstay Moderate's long position.| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Global Stock |
| Mainstay Moderate vs. Needham Aggressive Growth | Mainstay Moderate vs. Multimanager Lifestyle Aggressive | Mainstay Moderate vs. T Rowe Price | Mainstay Moderate vs. Western Asset High |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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