Correlation Between Dodge Cox and Artisan Value
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Artisan Value 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 Artisan Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Cox Stock and Artisan Value Income, you can compare the effects of market volatilities on Dodge Cox and Artisan Value 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 Artisan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Artisan Value.
Diversification Opportunities for Dodge Cox and Artisan Value
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Artisan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Artisan Value Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Value Income 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 Stock are associated (or correlated) with Artisan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Value Income has no effect on the direction of Dodge Cox i.e., Dodge Cox and Artisan Value go up and down completely randomly.
Pair Corralation between Dodge Cox and Artisan Value
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 1.23 times more return on investment than Artisan Value. However, Dodge Cox is 1.23 times more volatile than Artisan Value Income. It trades about 0.14 of its potential returns per unit of risk. Artisan Value Income is currently generating about 0.16 per unit of risk. If you would invest 25,399 in Dodge Cox Stock on September 1, 2024 and sell it today you would earn a total of 3,336 from holding Dodge Cox Stock or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Artisan Value Income
Performance |
| Timeline |
| Dodge Cox Stock |
| Artisan Value Income |
Dodge Cox and Artisan Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Artisan Value
The main advantage of trading using opposite Dodge Cox and Artisan Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Artisan Value 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 Artisan Value will offset losses from the drop in Artisan Value'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 |
| Artisan Value vs. Baron Health Care | Artisan Value vs. Health Care Fund | Artisan Value vs. Prudential Health Sciences | Artisan Value vs. Baillie Gifford Health |
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.
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