Correlation Between Dodge Cox and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Vanguard Emerging 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 Vanguard Emerging 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 Vanguard Emerging Markets, you can compare the effects of market volatilities on Dodge Cox and Vanguard Emerging 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 Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Vanguard Emerging.
Diversification Opportunities for Dodge Cox and Vanguard Emerging
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Vanguard is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets 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 Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Dodge Cox i.e., Dodge Cox and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Dodge Cox and Vanguard Emerging
Assuming the 90 days horizon Dodge Global Stock is expected to generate 0.76 times more return on investment than Vanguard Emerging. However, Dodge Global Stock is 1.32 times less risky than Vanguard Emerging. It trades about -0.05 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about -0.2 per unit of risk. If you would invest 1,662 in Dodge Global Stock on August 30, 2024 and sell it today you would lose (13.00) from holding Dodge Global Stock or give up 0.78% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.65% |
Values | Daily Returns |
Dodge Global Stock vs. Vanguard Emerging Markets
Performance |
Timeline |
Dodge Global Stock |
Vanguard Emerging Markets |
Dodge Cox and Vanguard Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dodge Cox and Vanguard Emerging
The main advantage of trading using opposite Dodge Cox and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Vanguard Emerging 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 Vanguard Emerging will offset losses from the drop in Vanguard Emerging's long position.Dodge Cox vs. Morgan Stanley Institutional | Dodge Cox vs. Pender Real Estate | Dodge Cox vs. Redwood Real Estate | Dodge Cox vs. Us Real Estate |
Vanguard Emerging vs. Vanguard Multi Sector Income | Vanguard Emerging vs. Vanguard Mid Cap Value | Vanguard Emerging vs. Vanguard Mid Cap Value | Vanguard Emerging vs. Vanguard Global Minimum |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |