Correlation Between Dodge Cox and Knife River
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Knife River 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 Knife River 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 Knife River, you can compare the effects of market volatilities on Dodge Cox and Knife River 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 Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Knife River.
Diversification Opportunities for Dodge Cox and Knife River
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dodge and Knife is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River 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 Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of Dodge Cox i.e., Dodge Cox and Knife River go up and down completely randomly.
Pair Corralation between Dodge Cox and Knife River
Assuming the 90 days horizon Dodge Global Stock is expected to generate 0.24 times more return on investment than Knife River. However, Dodge Global Stock is 4.15 times less risky than Knife River. It trades about 0.08 of its potential returns per unit of risk. Knife River is currently generating about -0.13 per unit of risk. If you would invest 1,448 in Dodge Global Stock on November 27, 2024 and sell it today you would earn a total of 15.00 from holding Dodge Global Stock or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Global Stock vs. Knife River
Performance |
| Timeline |
| Dodge Global Stock |
| Knife River |
Dodge Cox and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Knife River
The main advantage of trading using opposite Dodge Cox and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Knife River 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 Knife River will offset losses from the drop in Knife River's long position.| Dodge Cox vs. Vanguard Financials Index | Dodge Cox vs. John Hancock Financial | Dodge Cox vs. Davis Financial Fund | Dodge Cox vs. Putnam Global Financials |
| Knife River vs. Franklin Street Properties | Knife River vs. NL Industries | Knife River vs. Eddy Smart Home | Knife River vs. Alto Ingredients |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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