Correlation Between Dodge Cox and Voya High

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Voya High 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 Voya High 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 Voya High Dividend, you can compare the effects of market volatilities on Dodge Cox and Voya High 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 Voya High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Voya High.

Diversification Opportunities for Dodge Cox and Voya High

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Dodge and Voya is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Stock Fund and Voya High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya High Dividend 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 Voya High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya High Dividend has no effect on the direction of Dodge Cox i.e., Dodge Cox and Voya High go up and down completely randomly.

Pair Corralation between Dodge Cox and Voya High

Assuming the 90 days horizon Dodge Cox is expected to generate 1.05 times less return on investment than Voya High. In addition to that, Dodge Cox is 1.33 times more volatile than Voya High Dividend. It trades about 0.13 of its total potential returns per unit of risk. Voya High Dividend is currently generating about 0.18 per unit of volatility. If you would invest  1,088  in Voya High Dividend on August 29, 2024 and sell it today you would earn a total of  46.00  from holding Voya High Dividend or generate 4.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy33.6%
ValuesDaily Returns

Dodge Stock Fund  vs.  Voya High Dividend

 Performance 
       Timeline  
Dodge Stock Fund 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Stock Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Dodge Cox is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Voya High Dividend 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Voya High Dividend has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Voya High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dodge Cox and Voya High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dodge Cox and Voya High

The main advantage of trading using opposite Dodge Cox and Voya High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Voya High 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 Voya High will offset losses from the drop in Voya High's long position.
The idea behind Dodge Stock Fund and Voya High Dividend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Commodity Directory
Find actively traded commodities issued by global exchanges
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope