Correlation Between Dodge Cox and Midcap Growth
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Midcap Growth 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 Midcap Growth 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 Midcap Growth Fund, you can compare the effects of market volatilities on Dodge Cox and Midcap Growth 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 Midcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Midcap Growth.
Diversification Opportunities for Dodge Cox and Midcap Growth
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dodge and Midcap is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and Midcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap 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 Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Dodge Cox i.e., Dodge Cox and Midcap Growth go up and down completely randomly.
Pair Corralation between Dodge Cox and Midcap Growth
Assuming the 90 days horizon Dodge Cox Emerging is expected to generate 0.74 times more return on investment than Midcap Growth. However, Dodge Cox Emerging is 1.34 times less risky than Midcap Growth. It trades about 0.05 of its potential returns per unit of risk. Midcap Growth Fund is currently generating about 0.03 per unit of risk. If you would invest 733.00 in Dodge Cox Emerging on September 3, 2024 and sell it today you would earn a total of 167.00 from holding Dodge Cox Emerging or generate 22.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Dodge Cox Emerging vs. Midcap Growth Fund
Performance |
| Timeline |
| Dodge Cox Emerging |
| Midcap Growth |
Dodge Cox and Midcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Midcap Growth
The main advantage of trading using opposite Dodge Cox and Midcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Midcap Growth 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 Midcap Growth will offset losses from the drop in Midcap Growth's long position.| Dodge Cox vs. Vanguard Emerging Markets | Dodge Cox vs. Vanguard Emerging Markets | Dodge Cox vs. Vanguard Emerging Markets | Dodge Cox vs. Vanguard Emerging Markets |
| Midcap Growth vs. Dodge Cox Emerging | Midcap Growth vs. Ep Emerging Markets | Midcap Growth vs. Angel Oak Multi Strategy | Midcap Growth vs. T Rowe Price |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |