Correlation Between Dodge Cox and Balanced Fund
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Balanced Fund 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 Balanced Fund 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 Balanced Fund Retail, you can compare the effects of market volatilities on Dodge Cox and Balanced Fund 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 Balanced Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Balanced Fund.
Diversification Opportunities for Dodge Cox and Balanced Fund
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dodge and Balanced is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Balanced Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Fund Retail 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 Balanced Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Fund Retail has no effect on the direction of Dodge Cox i.e., Dodge Cox and Balanced Fund go up and down completely randomly.
Pair Corralation between Dodge Cox and Balanced Fund
Assuming the 90 days horizon Dodge International Stock is expected to under-perform the Balanced Fund. In addition to that, Dodge Cox is 1.21 times more volatile than Balanced Fund Retail. It trades about -0.25 of its total potential returns per unit of risk. Balanced Fund Retail is currently generating about 0.07 per unit of volatility. If you would invest 1,423 in Balanced Fund Retail on August 29, 2024 and sell it today you would earn a total of 12.00 from holding Balanced Fund Retail or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dodge International Stock vs. Balanced Fund Retail
Performance |
| Timeline |
| Dodge International Stock |
| Balanced Fund Retail |
Dodge Cox and Balanced Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Balanced Fund
The main advantage of trading using opposite Dodge Cox and Balanced Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Balanced Fund 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 Balanced Fund will offset losses from the drop in Balanced Fund'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 |
| Balanced Fund vs. All Asset Fund | Balanced Fund vs. HUMANA INC | Balanced Fund vs. Aquagold International | Balanced Fund vs. Barloworld Ltd ADR |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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