Correlation Between Dodge Cox and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Oakmark 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 Oakmark 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 Oakmark International Fund, you can compare the effects of market volatilities on Dodge Cox and Oakmark 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 Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Oakmark International.
Diversification Opportunities for Dodge Cox and Oakmark International
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Oakmark is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox International and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark 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 Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Dodge Cox i.e., Dodge Cox and Oakmark International go up and down completely randomly.
Pair Corralation between Dodge Cox and Oakmark International
Assuming the 90 days horizon Dodge Cox International is expected to generate 0.86 times more return on investment than Oakmark International. However, Dodge Cox International is 1.16 times less risky than Oakmark International. It trades about 0.06 of its potential returns per unit of risk. Oakmark International Fund is currently generating about 0.03 per unit of risk. If you would invest 4,283 in Dodge Cox International on September 3, 2024 and sell it today you would earn a total of 1,004 from holding Dodge Cox International or generate 23.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox International vs. Oakmark International Fund
Performance |
| Timeline |
| Dodge Cox International |
| Oakmark International |
Dodge Cox and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Oakmark International
The main advantage of trading using opposite Dodge Cox and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Oakmark 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 Oakmark International will offset losses from the drop in Oakmark International's long position.| Dodge Cox vs. Wells Fargo Funds | Dodge Cox vs. General Money Market | Dodge Cox vs. Prudential Government Money | Dodge Cox vs. John Hancock Money |
| Oakmark International vs. Oakmark Fund Investor | Oakmark International vs. Oakmark Select Fund | Oakmark International vs. Oakmark International Small | Oakmark International vs. Oakmark 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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