Correlation Between Dodge Cox and Lkcm Equity
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Lkcm Equity 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 Lkcm Equity 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 Lkcm Equity Fund, you can compare the effects of market volatilities on Dodge Cox and Lkcm Equity 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 Lkcm Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Lkcm Equity.
Diversification Opportunities for Dodge Cox and Lkcm Equity
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dodge and Lkcm is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Lkcm Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Equity Fund 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 Lkcm Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Equity Fund has no effect on the direction of Dodge Cox i.e., Dodge Cox and Lkcm Equity go up and down completely randomly.
Pair Corralation between Dodge Cox and Lkcm Equity
Assuming the 90 days horizon Dodge Cox is expected to generate 18.62 times less return on investment than Lkcm Equity. In addition to that, Dodge Cox is 1.03 times more volatile than Lkcm Equity Fund. It trades about 0.01 of its total potential returns per unit of risk. Lkcm Equity Fund is currently generating about 0.12 per unit of volatility. If you would invest 3,690 in Lkcm Equity Fund on September 1, 2024 and sell it today you would earn a total of 475.00 from holding Lkcm Equity Fund or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Dodge International Stock vs. Lkcm Equity Fund
Performance |
| Timeline |
| Dodge International Stock |
| Lkcm Equity Fund |
Dodge Cox and Lkcm Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Lkcm Equity
The main advantage of trading using opposite Dodge Cox and Lkcm Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Lkcm Equity 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 Lkcm Equity will offset losses from the drop in Lkcm Equity'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 |
| Lkcm Equity vs. Lkcm Aquinas Catholic | Lkcm Equity vs. Lkcm Balanced Fund | Lkcm Equity vs. Lkcm Fixed Income | Lkcm Equity vs. Lkcm International Equity |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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