Correlation Between Dodge Cox and Stagwell
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Stagwell 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 Stagwell 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 Stagwell, you can compare the effects of market volatilities on Dodge Cox and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Stagwell.
Diversification Opportunities for Dodge Cox and Stagwell
Good diversification
The 3 months correlation between Dodge and Stagwell is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Dodge Cox i.e., Dodge Cox and Stagwell go up and down completely randomly.
Pair Corralation between Dodge Cox and Stagwell
Assuming the 90 days horizon Dodge Cox is expected to generate 29.37 times less return on investment than Stagwell. But when comparing it to its historical volatility, Dodge Global Stock is 4.17 times less risky than Stagwell. It trades about 0.06 of its potential returns per unit of risk. Stagwell is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 621.00 in Stagwell on September 1, 2024 and sell it today you would earn a total of 165.00 from holding Stagwell or generate 26.57% 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. Stagwell
Performance |
| Timeline |
| Dodge Global Stock |
| Stagwell |
Dodge Cox and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Stagwell
The main advantage of trading using opposite Dodge Cox and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell'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 |
| Stagwell vs. ADTRAN Inc | Stagwell vs. Belden Inc | Stagwell vs. ADC Therapeutics SA | Stagwell vs. Comtech Telecommunications Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |