Correlation Between Dodge Cox and Energy Services
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Energy Services 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 Energy Services 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 Energy Services Fund, you can compare the effects of market volatilities on Dodge Cox and Energy Services 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 Energy Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Energy Services.
Diversification Opportunities for Dodge Cox and Energy Services
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dodge and Energy is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and Energy Services Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Services 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 Energy Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Services has no effect on the direction of Dodge Cox i.e., Dodge Cox and Energy Services go up and down completely randomly.
Pair Corralation between Dodge Cox and Energy Services
Assuming the 90 days horizon Dodge Cox Emerging is expected to generate 0.51 times more return on investment than Energy Services. However, Dodge Cox Emerging is 1.97 times less risky than Energy Services. It trades about 0.07 of its potential returns per unit of risk. Energy Services Fund is currently generating about 0.02 per unit of risk. If you would invest 782.00 in Dodge Cox Emerging on September 4, 2024 and sell it today you would earn a total of 118.00 from holding Dodge Cox Emerging or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Emerging vs. Energy Services Fund
Performance |
| Timeline |
| Dodge Cox Emerging |
| Energy Services |
Dodge Cox and Energy Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Energy Services
The main advantage of trading using opposite Dodge Cox and Energy Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Energy Services 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 Energy Services will offset losses from the drop in Energy Services' 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 |
| Energy Services vs. Goldman Sachs Short | Energy Services vs. Barings Active Short | Energy Services vs. Touchstone Ultra Short | Energy Services vs. Maryland Short Term Tax Free |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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