Correlation Between Dodge Cox and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Nuveen Preferred 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 Nuveen Preferred 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 Nuveen Preferred Securities, you can compare the effects of market volatilities on Dodge Cox and Nuveen Preferred 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 Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Nuveen Preferred.
Diversification Opportunities for Dodge Cox and Nuveen Preferred
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Nuveen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and Nuveen Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred Sec 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 Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred Sec has no effect on the direction of Dodge Cox i.e., Dodge Cox and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Dodge Cox and Nuveen Preferred
Assuming the 90 days horizon Dodge Cox Emerging is expected to generate 3.55 times more return on investment than Nuveen Preferred. However, Dodge Cox is 3.55 times more volatile than Nuveen Preferred Securities. It trades about 0.06 of its potential returns per unit of risk. Nuveen Preferred Securities is currently generating about 0.18 per unit of risk. If you would invest 751.00 in Dodge Cox Emerging on November 28, 2024 and sell it today you would earn a total of 174.00 from holding Dodge Cox Emerging or generate 23.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Emerging vs. Nuveen Preferred Securities
Performance |
| Timeline |
| Dodge Cox Emerging |
| Nuveen Preferred Sec |
Dodge Cox and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Nuveen Preferred
The main advantage of trading using opposite Dodge Cox and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Nuveen Preferred 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 Nuveen Preferred will offset losses from the drop in Nuveen Preferred's long position.| Dodge Cox vs. Ab Bond Inflation | Dodge Cox vs. Calvert Bond Portfolio | Dodge Cox vs. Versatile Bond Portfolio | Dodge Cox vs. Artisan High Income |
| Nuveen Preferred vs. Angel Oak Ultrashort | Nuveen Preferred vs. Metropolitan West Ultra | Nuveen Preferred vs. Ashmore Emerging Markets | Nuveen Preferred vs. Siit Ultra Short |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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