Correlation Between Dodge Cox and The Hartford
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and The Hartford 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 The Hartford 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 The Hartford Equity, you can compare the effects of market volatilities on Dodge Cox and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and The Hartford.
Diversification Opportunities for Dodge Cox and The Hartford
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dodge and The is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and The Hartford Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Equity has no effect on the direction of Dodge Cox i.e., Dodge Cox and The Hartford go up and down completely randomly.
Pair Corralation between Dodge Cox and The Hartford
Assuming the 90 days horizon Dodge International Stock is expected to under-perform the The Hartford. In addition to that, Dodge Cox is 1.02 times more volatile than The Hartford Equity. It trades about -0.25 of its total potential returns per unit of risk. The Hartford Equity is currently generating about 0.14 per unit of volatility. If you would invest 2,240 in The Hartford Equity on August 29, 2024 and sell it today you would earn a total of 48.00 from holding The Hartford Equity or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dodge International Stock vs. The Hartford Equity
Performance |
| Timeline |
| Dodge International Stock |
| Hartford Equity |
Dodge Cox and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and The Hartford
The main advantage of trading using opposite Dodge Cox and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford'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 |
| The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Total | The Hartford vs. The Hartford International | The Hartford vs. The Hartford Midcap |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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