Correlation Between Dodge Cox and Kentucky Tax-free
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Kentucky Tax-free 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 Kentucky Tax-free 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 Kentucky Tax Free Income, you can compare the effects of market volatilities on Dodge Cox and Kentucky Tax-free 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 Kentucky Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Kentucky Tax-free.
Diversification Opportunities for Dodge Cox and Kentucky Tax-free
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dodge and Kentucky is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Kentucky Tax Free Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky Tax Free 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 Kentucky Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky Tax Free has no effect on the direction of Dodge Cox i.e., Dodge Cox and Kentucky Tax-free go up and down completely randomly.
Pair Corralation between Dodge Cox and Kentucky Tax-free
Assuming the 90 days horizon Dodge Global Stock is expected to generate 3.24 times more return on investment than Kentucky Tax-free. However, Dodge Cox is 3.24 times more volatile than Kentucky Tax Free Income. It trades about 0.08 of its potential returns per unit of risk. Kentucky Tax Free Income is currently generating about 0.05 per unit of risk. If you would invest 1,314 in Dodge Global Stock on August 29, 2024 and sell it today you would earn a total of 330.00 from holding Dodge Global Stock or generate 25.11% 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. Kentucky Tax Free Income
Performance |
| Timeline |
| Dodge Global Stock |
| Kentucky Tax Free |
Dodge Cox and Kentucky Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Kentucky Tax-free
The main advantage of trading using opposite Dodge Cox and Kentucky Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Kentucky Tax-free 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 Kentucky Tax-free will offset losses from the drop in Kentucky Tax-free'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 |
| Kentucky Tax-free vs. Kentucky Tax Free Short To Medium | Kentucky Tax-free vs. North Carolina Tax Free | Kentucky Tax-free vs. Intermediate Government Bond | Kentucky Tax-free vs. Taxable Municipal Bond |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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