Correlation Between Dodge Cox and Federated Total
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Federated 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 Federated Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Global Stock and Federated Total Return, you can compare the effects of market volatilities on Dodge Cox and Federated 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 Federated Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Federated Total.
Diversification Opportunities for Dodge Cox and Federated Total
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dodge and Federated is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated 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 Global Stock are associated (or correlated) with Federated Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Dodge Cox i.e., Dodge Cox and Federated Total go up and down completely randomly.
Pair Corralation between Dodge Cox and Federated Total
Assuming the 90 days horizon Dodge Global Stock is expected to under-perform the Federated Total. In addition to that, Dodge Cox is 1.92 times more volatile than Federated Total Return. It trades about -0.05 of its total potential returns per unit of risk. Federated Total Return is currently generating about 0.09 per unit of volatility. If you would invest 938.00 in Federated Total Return on August 30, 2024 and sell it today you would earn a total of 6.00 from holding Federated Total Return or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Global Stock vs. Federated Total Return
Performance |
| Timeline |
| Dodge Global Stock |
| Federated Total Return |
Dodge Cox and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Federated Total
The main advantage of trading using opposite Dodge Cox and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Federated 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 Federated Total will offset losses from the drop in Federated Total's long position.| Dodge Cox vs. World Energy Fund | Dodge Cox vs. Goldman Sachs Mlp | Dodge Cox vs. Victory Global Natural | Dodge Cox vs. Dreyfus Natural Resources |
| Federated Total vs. Us Government Plus | Federated Total vs. Franklin Adjustable Government | Federated Total vs. Us Government Securities | Federated Total vs. Fidelity Series Government |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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