Correlation Between Dodge Cox and Lsv Value
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Lsv Value 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 Lsv Value 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 Lsv Value Equity, you can compare the effects of market volatilities on Dodge Cox and Lsv Value 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 Lsv Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Lsv Value.
Diversification Opportunities for Dodge Cox and Lsv Value
Almost no diversification
The 3 months correlation between Dodge and Lsv is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Stock Fund and Lsv Value Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Value 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 Stock Fund are associated (or correlated) with Lsv Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Value Equity has no effect on the direction of Dodge Cox i.e., Dodge Cox and Lsv Value go up and down completely randomly.
Pair Corralation between Dodge Cox and Lsv Value
Assuming the 90 days horizon Dodge Stock Fund is expected to generate 0.75 times more return on investment than Lsv Value. However, Dodge Stock Fund is 1.34 times less risky than Lsv Value. It trades about 0.09 of its potential returns per unit of risk. Lsv Value Equity is currently generating about 0.03 per unit of risk. If you would invest 20,538 in Dodge Stock Fund on September 2, 2024 and sell it today you would earn a total of 8,261 from holding Dodge Stock Fund or generate 40.22% 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. Lsv Value Equity
Performance |
| Timeline |
| Dodge Stock Fund |
| Lsv Value Equity |
Dodge Cox and Lsv Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Lsv Value
The main advantage of trading using opposite Dodge Cox and Lsv Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Lsv Value 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 Lsv Value will offset losses from the drop in Lsv Value'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 |
| Lsv Value vs. Causeway Emerging Markets | Lsv Value vs. Loomis Sayles Growth | Lsv Value vs. Fidelity Sai Treasury | Lsv Value vs. Transamerica 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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