Correlation Between Dodge International and Catholic Values
Can any of the company-specific risk be diversified away by investing in both Dodge International and Catholic Values 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 International and Catholic Values into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge International Stock and Catholic Values Fixed, you can compare the effects of market volatilities on Dodge International and Catholic Values 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 International with a short position of Catholic Values. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge International and Catholic Values.
Diversification Opportunities for Dodge International and Catholic Values
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dodge and Catholic is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Catholic Values Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catholic Values Fixed and Dodge International 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 International Stock are associated (or correlated) with Catholic Values. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catholic Values Fixed has no effect on the direction of Dodge International i.e., Dodge International and Catholic Values go up and down completely randomly.
Pair Corralation between Dodge International and Catholic Values
Assuming the 90 days horizon Dodge International is expected to generate 3.83 times less return on investment than Catholic Values. In addition to that, Dodge International is 2.43 times more volatile than Catholic Values Fixed. It trades about 0.01 of its total potential returns per unit of risk. Catholic Values Fixed is currently generating about 0.07 per unit of volatility. If you would invest 846.00 in Catholic Values Fixed on September 3, 2024 and sell it today you would earn a total of 24.00 from holding Catholic Values Fixed or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge International Stock vs. Catholic Values Fixed
Performance |
| Timeline |
| Dodge International Stock |
| Catholic Values Fixed |
Dodge International and Catholic Values Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge International and Catholic Values
The main advantage of trading using opposite Dodge International and Catholic Values positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge International position performs unexpectedly, Catholic Values 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 Catholic Values will offset losses from the drop in Catholic Values' long position.| Dodge International vs. Dodge Stock Fund | Dodge International vs. Dodge Income Fund | Dodge International vs. Dodge Balanced Fund | Dodge International vs. The Fairholme Fund |
| Catholic Values vs. Western Asset Inflation | Catholic Values vs. T Rowe Price | Catholic Values vs. Aqr Managed Futures | Catholic Values vs. Goldman Sachs Managed |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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