Correlation Between Dodge Cox and George Putnam
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and George Putnam 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 George Putnam 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 George Putnam Fund, you can compare the effects of market volatilities on Dodge Cox and George Putnam 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 George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and George Putnam.
Diversification Opportunities for Dodge Cox and George Putnam
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and George is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam 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 George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam has no effect on the direction of Dodge Cox i.e., Dodge Cox and George Putnam go up and down completely randomly.
Pair Corralation between Dodge Cox and George Putnam
Assuming the 90 days horizon Dodge Cox Emerging is expected to generate 0.8 times more return on investment than George Putnam. However, Dodge Cox Emerging is 1.25 times less risky than George Putnam. It trades about -0.07 of its potential returns per unit of risk. George Putnam Fund is currently generating about -0.16 per unit of risk. If you would invest 932.00 in Dodge Cox Emerging on September 12, 2024 and sell it today you would lose (9.00) from holding Dodge Cox Emerging or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Emerging vs. George Putnam Fund
Performance |
| Timeline |
| Dodge Cox Emerging |
| George Putnam |
Dodge Cox and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and George Putnam
The main advantage of trading using opposite Dodge Cox and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.| Dodge Cox vs. Guidemark Large Cap | Dodge Cox vs. T Rowe Price | Dodge Cox vs. Morningstar Unconstrained Allocation | Dodge Cox vs. Fm Investments Large |
| George Putnam vs. Hewitt Money Market | George Putnam vs. Edward Jones Money | George Putnam vs. Hsbc Treasury Money | George Putnam vs. Ubs Money Series |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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