Correlation Between Dodge Cox and Value Fund
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Value Fund 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 Value Fund 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 Value Fund Value, you can compare the effects of market volatilities on Dodge Cox and Value Fund 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 Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Value Fund.
Diversification Opportunities for Dodge Cox and Value Fund
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dodge and Value is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Stock Fund and Value Fund Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund Value 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 Stock Fund are associated (or correlated) with Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund Value has no effect on the direction of Dodge Cox i.e., Dodge Cox and Value Fund go up and down completely randomly.
Pair Corralation between Dodge Cox and Value Fund
Assuming the 90 days horizon Dodge Cox is expected to generate 1.02 times less return on investment than Value Fund. In addition to that, Dodge Cox is 1.05 times more volatile than Value Fund Value. It trades about 0.14 of its total potential returns per unit of risk. Value Fund Value is currently generating about 0.15 per unit of volatility. If you would invest 5,427 in Value Fund Value on August 28, 2024 and sell it today you would earn a total of 360.00 from holding Value Fund Value or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Stock Fund vs. Value Fund Value
Performance |
| Timeline |
| Dodge Stock Fund |
| Value Fund Value |
Dodge Cox and Value Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Value Fund
The main advantage of trading using opposite Dodge Cox and Value Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Value Fund 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 Value Fund will offset losses from the drop in Value Fund's long position.| Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Total Return Fund |
| Value Fund vs. International Equity Fund | Value Fund vs. Growth Fund Growth | Value Fund vs. Homestead Intermediate Bond | Value Fund vs. Short Term Bond 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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