Correlation Between Dodge International and Northern International
Can any of the company-specific risk be diversified away by investing in both Dodge International and Northern 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 International and Northern 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 Northern International Equity, you can compare the effects of market volatilities on Dodge International and Northern 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 International with a short position of Northern International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge International and Northern International.
Diversification Opportunities for Dodge International and Northern International
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Northern is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Northern International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern International and Dodge International 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 Northern International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern International has no effect on the direction of Dodge International i.e., Dodge International and Northern International go up and down completely randomly.
Pair Corralation between Dodge International and Northern International
Assuming the 90 days horizon Dodge International is expected to generate 1.09 times less return on investment than Northern International. In addition to that, Dodge International is 1.03 times more volatile than Northern International Equity. It trades about 0.06 of its total potential returns per unit of risk. Northern International Equity is currently generating about 0.07 per unit of volatility. If you would invest 940.00 in Northern International Equity on September 4, 2024 and sell it today you would earn a total of 120.00 from holding Northern International Equity or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge International Stock vs. Northern International Equity
Performance |
| Timeline |
| Dodge International Stock |
| Northern International |
Dodge International and Northern International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge International and Northern International
The main advantage of trading using opposite Dodge International and Northern International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge International position performs unexpectedly, Northern 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 Northern International will offset losses from the drop in Northern International's long position.| Dodge International vs. Dodge Stock Fund | Dodge International vs. Dodge Income Fund | Dodge International vs. Dodge Balanced Fund | Dodge International vs. The Fairholme Fund |
| Northern International vs. Northern Bond Index | Northern International vs. Northern E Bond | Northern International vs. Northern Arizona Tax Exempt | Northern International vs. Northern 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Commodity Directory Find actively traded commodities issued by global exchanges |