Correlation Between Dodge Cox and Global Core
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Global Core 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 Global Core 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 Global E Portfolio, you can compare the effects of market volatilities on Dodge Cox and Global Core 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 Global Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Global Core.
Diversification Opportunities for Dodge Cox and Global Core
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dodge and Global is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Global E Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Portfolio 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 Global Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Portfolio has no effect on the direction of Dodge Cox i.e., Dodge Cox and Global Core go up and down completely randomly.
Pair Corralation between Dodge Cox and Global Core
Assuming the 90 days horizon Dodge Cox is expected to generate 1.89 times less return on investment than Global Core. But when comparing it to its historical volatility, Dodge Global Stock is 1.23 times less risky than Global Core. It trades about 0.09 of its potential returns per unit of risk. Global E Portfolio is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,641 in Global E Portfolio on September 2, 2024 and sell it today you would earn a total of 543.00 from holding Global E Portfolio or generate 33.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Global Stock vs. Global E Portfolio
Performance |
| Timeline |
| Dodge Global Stock |
| Global E Portfolio |
Dodge Cox and Global Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Global Core
The main advantage of trading using opposite Dodge Cox and Global Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Global Core 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 Global Core will offset losses from the drop in Global Core's long position.| Dodge Cox vs. Adams Diversified Equity | Dodge Cox vs. Fidelity Advisor Diversified | Dodge Cox vs. Principal Lifetime Hybrid | Dodge Cox vs. Tiaa Cref Smallmid Cap Equity |
| Global Core vs. Victory Rs Small | Global Core vs. Chase Growth Fund | Global Core vs. T Rowe Price | Global Core vs. Ab 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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