Correlation Between Dodge Stock and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Dodge Stock and Dodge Cox 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 Stock and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Stock Fund and Dodge Cox International, you can compare the effects of market volatilities on Dodge Stock and Dodge Cox 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 Stock with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Stock and Dodge Cox.
Diversification Opportunities for Dodge Stock and Dodge Cox
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dodge and Dodge is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Stock Fund and Dodge Cox International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox International and Dodge Stock 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 Stock Fund are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox International has no effect on the direction of Dodge Stock i.e., Dodge Stock and Dodge Cox go up and down completely randomly.
Pair Corralation between Dodge Stock and Dodge Cox
Assuming the 90 days horizon Dodge Stock Fund is expected to generate 0.85 times more return on investment than Dodge Cox. However, Dodge Stock Fund is 1.18 times less risky than Dodge Cox. It trades about 0.14 of its potential returns per unit of risk. Dodge Cox International is currently generating about 0.06 per unit of risk. If you would invest 22,763 in Dodge Stock Fund on September 4, 2024 and sell it today you would earn a total of 5,781 from holding Dodge Stock Fund or generate 25.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Stock Fund vs. Dodge Cox International
Performance |
| Timeline |
| Dodge Stock Fund |
| Dodge Cox International |
Dodge Stock and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Stock and Dodge Cox
The main advantage of trading using opposite Dodge Stock and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Stock position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Dodge Stock vs. Dodge International Stock | Dodge Stock vs. Dodge Balanced Fund | Dodge Stock vs. Dodge Income Fund | Dodge Stock vs. Total Return Fund |
| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Global Stock | Dodge Cox vs. Dodge Income Fund |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |