Correlation Between Dodge Cox and Praxis Value
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Praxis 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 Praxis 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 Praxis Value Index, you can compare the effects of market volatilities on Dodge Cox and Praxis 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 Praxis Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Praxis Value.
Diversification Opportunities for Dodge Cox and Praxis Value
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dodge and Praxis is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Stock Fund and Praxis Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Value Index 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 Praxis Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Value Index has no effect on the direction of Dodge Cox i.e., Dodge Cox and Praxis Value go up and down completely randomly.
Pair Corralation between Dodge Cox and Praxis Value
Assuming the 90 days horizon Dodge Stock Fund is expected to under-perform the Praxis Value. In addition to that, Dodge Cox is 1.05 times more volatile than Praxis Value Index. It trades about -0.03 of its total potential returns per unit of risk. Praxis Value Index is currently generating about 0.01 per unit of volatility. If you would invest 1,812 in Praxis Value Index on November 29, 2024 and sell it today you would earn a total of 1.00 from holding Praxis Value Index or generate 0.06% 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. Praxis Value Index
Performance |
| Timeline |
| Dodge Stock Fund |
| Praxis Value Index |
Dodge Cox and Praxis Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Praxis Value
The main advantage of trading using opposite Dodge Cox and Praxis Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Praxis 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 Praxis Value will offset losses from the drop in Praxis 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 |
| Praxis Value vs. Pimco Emerging Markets | Praxis Value vs. Pace International Emerging | Praxis Value vs. Dodge Cox Emerging | Praxis Value vs. Ashmore 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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