Correlation Between Dodge Cox and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Dodge Cox 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 Dodge Cox 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 Dodge Income Fund, you can compare the effects of market volatilities on Dodge Cox and Dodge Cox 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 Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Dodge Cox.
Diversification Opportunities for Dodge Cox and Dodge Cox
Modest diversification
The 3 months correlation between Dodge and Dodge is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Dodge Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Income 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 International Stock are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Income has no effect on the direction of Dodge Cox i.e., Dodge Cox and Dodge Cox go up and down completely randomly.
Pair Corralation between Dodge Cox and Dodge Cox
Assuming the 90 days horizon Dodge International Stock is expected to under-perform the Dodge Cox. In addition to that, Dodge Cox is 1.89 times more volatile than Dodge Income Fund. It trades about -0.22 of its total potential returns per unit of risk. Dodge Income Fund is currently generating about 0.09 per unit of volatility. If you would invest 1,260 in Dodge Income Fund on August 27, 2024 and sell it today you would earn a total of 9.00 from holding Dodge Income Fund or generate 0.71% 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. Dodge Income Fund
Performance |
| Timeline |
| Dodge International Stock |
| Dodge Income |
Dodge Cox and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Dodge Cox
The main advantage of trading using opposite Dodge Cox and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. The Fairholme Fund |
| Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Harbor Bond Fund |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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