Correlation Between Dodge Stock and Investec Global
Can any of the company-specific risk be diversified away by investing in both Dodge Stock and Investec Global 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 Investec Global 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 Investec Global Franchise, you can compare the effects of market volatilities on Dodge Stock and Investec Global 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 Investec Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Stock and Investec Global.
Diversification Opportunities for Dodge Stock and Investec Global
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and Investec is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Stock Fund and Investec Global Franchise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Global Franchise 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 Investec Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Global Franchise has no effect on the direction of Dodge Stock i.e., Dodge Stock and Investec Global go up and down completely randomly.
Pair Corralation between Dodge Stock and Investec Global
Assuming the 90 days horizon Dodge Stock Fund is expected to under-perform the Investec Global. In addition to that, Dodge Stock is 2.21 times more volatile than Investec Global Franchise. It trades about -0.3 of its total potential returns per unit of risk. Investec Global Franchise is currently generating about 0.03 per unit of volatility. If you would invest 1,757 in Investec Global Franchise on September 21, 2024 and sell it today you would earn a total of 7.00 from holding Investec Global Franchise or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Stock Fund vs. Investec Global Franchise
Performance |
| Timeline |
| Dodge Stock Fund |
| Investec Global Franchise |
Dodge Stock and Investec Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Stock and Investec Global
The main advantage of trading using opposite Dodge Stock and Investec Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Stock position performs unexpectedly, Investec Global 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 Investec Global will offset losses from the drop in Investec Global'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 |
| Investec Global vs. Investec Emerging Markets | Investec Global vs. Ninety One International | Investec Global vs. Vanguard 500 Index | Investec Global vs. Dodge Stock 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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