Correlation Between Dodge Cox and Pimco Total
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Pimco Total 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 Pimco Total 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 Pimco Total Return, you can compare the effects of market volatilities on Dodge Cox and Pimco Total 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 Pimco Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Pimco Total.
Diversification Opportunities for Dodge Cox and Pimco Total
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Dodge and Pimco is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Income Fund and Pimco Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Total Return 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 Pimco Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Total Return has no effect on the direction of Dodge Cox i.e., Dodge Cox and Pimco Total go up and down completely randomly.
Pair Corralation between Dodge Cox and Pimco Total
Assuming the 90 days horizon Dodge Income Fund is expected to generate 1.07 times more return on investment than Pimco Total. However, Dodge Cox is 1.07 times more volatile than Pimco Total Return. It trades about 0.14 of its potential returns per unit of risk. Pimco Total Return is currently generating about 0.13 per unit of risk. If you would invest 1,260 in Dodge Income Fund on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Dodge Income Fund or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dodge Income Fund vs. Pimco Total Return
Performance |
| Timeline |
| Dodge Income |
| Pimco Total Return |
Dodge Cox and Pimco Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Pimco Total
The main advantage of trading using opposite Dodge Cox and Pimco Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Pimco Total 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 Pimco Total will offset losses from the drop in Pimco Total'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 |
| Pimco Total vs. Pimco Rae Worldwide | Pimco Total vs. Pimco Rae Worldwide | Pimco Total vs. Pimco Rae Worldwide | Pimco Total vs. Pimco Rae Worldwide |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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