Correlation Between Dodge Cox and Short Real
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Short Real 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 Short Real 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 Short Real Estate, you can compare the effects of market volatilities on Dodge Cox and Short Real 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 Short Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Short Real.
Diversification Opportunities for Dodge Cox and Short Real
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dodge and Short is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Short Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Real Estate 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 Short Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Real Estate has no effect on the direction of Dodge Cox i.e., Dodge Cox and Short Real go up and down completely randomly.
Pair Corralation between Dodge Cox and Short Real
Assuming the 90 days horizon Dodge Global Stock is expected to generate 0.75 times more return on investment than Short Real. However, Dodge Global Stock is 1.34 times less risky than Short Real. It trades about 0.05 of its potential returns per unit of risk. Short Real Estate is currently generating about -0.01 per unit of risk. If you would invest 1,339 in Dodge Global Stock on August 26, 2024 and sell it today you would earn a total of 299.00 from holding Dodge Global Stock or generate 22.33% 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. Short Real Estate
Performance |
| Timeline |
| Dodge Global Stock |
| Short Real Estate |
Dodge Cox and Short Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Short Real
The main advantage of trading using opposite Dodge Cox and Short Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Short Real 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 Short Real will offset losses from the drop in Short Real'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 |
| Short Real vs. Ms Global Fixed | Short Real vs. Barings Global Floating | Short Real vs. Dodge Global Stock | Short Real vs. Kinetics Global Fund |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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