Correlation Between Dodge Cox and Brandes International
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Brandes International 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 Brandes International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Cox International and Brandes International Equity, you can compare the effects of market volatilities on Dodge Cox and Brandes International 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 Brandes International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Brandes International.
Diversification Opportunities for Dodge Cox and Brandes International
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dodge and Brandes is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox International and Brandes International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes International 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 Cox International are associated (or correlated) with Brandes International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes International has no effect on the direction of Dodge Cox i.e., Dodge Cox and Brandes International go up and down completely randomly.
Pair Corralation between Dodge Cox and Brandes International
Assuming the 90 days horizon Dodge Cox is expected to generate 1.44 times less return on investment than Brandes International. In addition to that, Dodge Cox is 1.07 times more volatile than Brandes International Equity. It trades about 0.04 of its total potential returns per unit of risk. Brandes International Equity is currently generating about 0.07 per unit of volatility. If you would invest 2,138 in Brandes International Equity on November 28, 2024 and sell it today you would earn a total of 193.00 from holding Brandes International Equity or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.46% |
| Values | Daily Returns |
Dodge Cox International vs. Brandes International Equity
Performance |
| Timeline |
| Dodge Cox International |
| Brandes International |
Dodge Cox and Brandes International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Brandes International
The main advantage of trading using opposite Dodge Cox and Brandes International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Brandes International 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 Brandes International will offset losses from the drop in Brandes International's long position.| Dodge Cox vs. Gmo High Yield | Dodge Cox vs. Artisan High Income | Dodge Cox vs. Simt High Yield | Dodge Cox vs. Payden High Income |
| Brandes International vs. Tcm Small Cap | Brandes International vs. Vanguard Short Term Investment Grade | Brandes International vs. Goldman Sachs Growth | Brandes International vs. Us 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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