Correlation Between Dodge Cox and Performance Trust
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Performance Trust 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 Performance Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Global Bond and Performance Trust Strategic, you can compare the effects of market volatilities on Dodge Cox and Performance Trust 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 Performance Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Performance Trust.
Diversification Opportunities for Dodge Cox and Performance Trust
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dodge and Performance is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Bond and Performance Trust Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust 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 Global Bond are associated (or correlated) with Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust has no effect on the direction of Dodge Cox i.e., Dodge Cox and Performance Trust go up and down completely randomly.
Pair Corralation between Dodge Cox and Performance Trust
Assuming the 90 days horizon Dodge Cox is expected to generate 1.26 times less return on investment than Performance Trust. But when comparing it to its historical volatility, Dodge Global Bond is 1.02 times less risky than Performance Trust. It trades about 0.09 of its potential returns per unit of risk. Performance Trust Strategic is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,916 in Performance Trust Strategic on September 1, 2024 and sell it today you would earn a total of 85.00 from holding Performance Trust Strategic or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Global Bond vs. Performance Trust Strategic
Performance |
| Timeline |
| Dodge Global Bond |
| Performance Trust |
Dodge Cox and Performance Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Performance Trust
The main advantage of trading using opposite Dodge Cox and Performance Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Performance Trust 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 Performance Trust will offset losses from the drop in Performance Trust's long position.| Dodge Cox vs. Dodge Global Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Hotchkis Wiley High |
| Performance Trust vs. Alphacentric Income Opportunities | Performance Trust vs. Performance Trust Municipal | Performance Trust vs. Guggenheim Total Return | Performance Trust vs. Pimco Income 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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