Correlation Between Dodge Cox and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Dodge Cox 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 Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Income Fund and Dodge International Stock, you can compare the effects of market volatilities on Dodge Cox and Dodge Cox 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 Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Dodge Cox.
Diversification Opportunities for Dodge Cox and Dodge Cox
Modest diversification
The 3 months correlation between Dodge and Dodge is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Income Fund and Dodge International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge International Stock 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 Income Fund are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge International Stock has no effect on the direction of Dodge Cox i.e., Dodge Cox and Dodge Cox go up and down completely randomly.
Pair Corralation between Dodge Cox and Dodge Cox
Assuming the 90 days horizon Dodge Income Fund is expected to generate 0.53 times more return on investment than Dodge Cox. However, Dodge Income Fund is 1.89 times less risky than Dodge Cox. It trades about 0.09 of its potential returns per unit of risk. Dodge International Stock is currently generating about -0.22 per unit of risk. If you would invest 1,260 in Dodge Income Fund on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Dodge Income Fund or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Income Fund vs. Dodge International Stock
Performance |
| Timeline |
| Dodge Income |
| Dodge International Stock |
Dodge Cox and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Dodge Cox
The main advantage of trading using opposite Dodge Cox and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Harbor Bond Fund |
| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. The Fairholme 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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