Correlation Between Dodge Cox and Harbor International
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Harbor International 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 Harbor International 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 Harbor International Fund, you can compare the effects of market volatilities on Dodge Cox and Harbor International 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 Harbor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Harbor International.
Diversification Opportunities for Dodge Cox and Harbor International
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dodge and Harbor is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Harbor International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor International 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 Harbor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor International has no effect on the direction of Dodge Cox i.e., Dodge Cox and Harbor International go up and down completely randomly.
Pair Corralation between Dodge Cox and Harbor International
Assuming the 90 days horizon Dodge International Stock is expected to under-perform the Harbor International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dodge International Stock is 1.08 times less risky than Harbor International. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Harbor International Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,714 in Harbor International Fund on September 1, 2024 and sell it today you would earn a total of 60.00 from holding Harbor International Fund or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge International Stock vs. Harbor International Fund
Performance |
| Timeline |
| Dodge International Stock |
| Harbor International |
Dodge Cox and Harbor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Harbor International
The main advantage of trading using opposite Dodge Cox and Harbor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Harbor International 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 Harbor International will offset losses from the drop in Harbor International'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 |
| Harbor International vs. Eagle Mlp Strategy | Harbor International vs. Shelton Emerging Markets | Harbor International vs. Ashmore Emerging Markets | Harbor International vs. Siit Emerging Markets |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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