Correlation Between Dodge Cox and Aberdeen Select
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Aberdeen Select 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 Aberdeen Select 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 Aberdeen Select International, you can compare the effects of market volatilities on Dodge Cox and Aberdeen Select 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 Aberdeen Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Aberdeen Select.
Diversification Opportunities for Dodge Cox and Aberdeen Select
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dodge and Aberdeen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Aberdeen Select International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Select Inte 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 Aberdeen Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Select Inte has no effect on the direction of Dodge Cox i.e., Dodge Cox and Aberdeen Select go up and down completely randomly.
Pair Corralation between Dodge Cox and Aberdeen Select
Assuming the 90 days horizon Dodge Global Stock is expected to generate 0.96 times more return on investment than Aberdeen Select. However, Dodge Global Stock is 1.04 times less risky than Aberdeen Select. It trades about -0.06 of its potential returns per unit of risk. Aberdeen Select International is currently generating about -0.13 per unit of risk. If you would invest 1,665 in Dodge Global Stock on August 28, 2024 and sell it today you would lose (14.00) from holding Dodge Global Stock or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Global Stock vs. Aberdeen Select International
Performance |
| Timeline |
| Dodge Global Stock |
| Aberdeen Select Inte |
Dodge Cox and Aberdeen Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Aberdeen Select
The main advantage of trading using opposite Dodge Cox and Aberdeen Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Aberdeen Select 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 Aberdeen Select will offset losses from the drop in Aberdeen Select's long position.| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Balanced Fund |
| Aberdeen Select vs. Marsico 21st Century | Aberdeen Select vs. Harbor International Fund | Aberdeen Select vs. Loomis Sayles Bond | Aberdeen Select vs. Northern Small Cap |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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