Correlation Between Dodge Cox and Buffalo Flexible
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Buffalo Flexible 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 Buffalo Flexible 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 Buffalo Flexible Income, you can compare the effects of market volatilities on Dodge Cox and Buffalo Flexible 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 Buffalo Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Buffalo Flexible.
Diversification Opportunities for Dodge Cox and Buffalo Flexible
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and Buffalo is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Buffalo Flexible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buffalo Flexible 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 Buffalo Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buffalo Flexible Income has no effect on the direction of Dodge Cox i.e., Dodge Cox and Buffalo Flexible go up and down completely randomly.
Pair Corralation between Dodge Cox and Buffalo Flexible
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 1.27 times more return on investment than Buffalo Flexible. However, Dodge Cox is 1.27 times more volatile than Buffalo Flexible Income. It trades about 0.02 of its potential returns per unit of risk. Buffalo Flexible Income is currently generating about -0.14 per unit of risk. If you would invest 27,894 in Dodge Cox Stock on September 13, 2024 and sell it today you would earn a total of 168.00 from holding Dodge Cox Stock or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Buffalo Flexible Income
Performance |
| Timeline |
| Dodge Cox Stock |
| Buffalo Flexible Income |
Dodge Cox and Buffalo Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Buffalo Flexible
The main advantage of trading using opposite Dodge Cox and Buffalo Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Buffalo Flexible 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 Buffalo Flexible will offset losses from the drop in Buffalo Flexible's long position.| Dodge Cox vs. Morningstar Unconstrained Allocation | Dodge Cox vs. Aqr Large Cap | Dodge Cox vs. Fisher Large Cap |
| Buffalo Flexible vs. Villere Balanced Fund | Buffalo Flexible vs. Buffalo High Yield | Buffalo Flexible vs. Buffalo Growth Fund | Buffalo Flexible vs. James Balanced Golden |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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