Correlation Between Dodge Cox and Sa International
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Sa 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 Sa 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 Sa International Value, you can compare the effects of market volatilities on Dodge Cox and Sa 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 Sa International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Sa International.
Diversification Opportunities for Dodge Cox and Sa International
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and SAHMX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox International and Sa International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa International Value 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 Sa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa International Value has no effect on the direction of Dodge Cox i.e., Dodge Cox and Sa International go up and down completely randomly.
Pair Corralation between Dodge Cox and Sa International
Assuming the 90 days horizon Dodge Cox is expected to generate 1.08 times less return on investment than Sa International. In addition to that, Dodge Cox is 1.06 times more volatile than Sa International Value. It trades about 0.06 of its total potential returns per unit of risk. Sa International Value is currently generating about 0.07 per unit of volatility. If you would invest 1,206 in Sa International Value on September 3, 2024 and sell it today you would earn a total of 153.00 from holding Sa International Value or generate 12.69% 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. Sa International Value
Performance |
| Timeline |
| Dodge Cox International |
| Sa International Value |
Dodge Cox and Sa International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Sa International
The main advantage of trading using opposite Dodge Cox and Sa International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Sa 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 Sa International will offset losses from the drop in Sa 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 |
| Sa International vs. Energy Basic Materials | Sa International vs. Fidelity Advisor Energy | Sa International vs. Invesco Energy Fund | Sa International vs. Calvert Global Energy |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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