Correlation Between Dodge Cox and Bond Fund
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Bond Fund 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 Bond Fund 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 Bond Fund Of, you can compare the effects of market volatilities on Dodge Cox and Bond Fund 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 Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Bond Fund.
Diversification Opportunities for Dodge Cox and Bond Fund
Pay attention - limited upside
The 3 months correlation between Dodge and Bond is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Bond Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund 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 Bond Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund has no effect on the direction of Dodge Cox i.e., Dodge Cox and Bond Fund go up and down completely randomly.
Pair Corralation between Dodge Cox and Bond Fund
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 1.84 times more return on investment than Bond Fund. However, Dodge Cox is 1.84 times more volatile than Bond Fund Of. It trades about 0.09 of its potential returns per unit of risk. Bond Fund Of is currently generating about 0.01 per unit of risk. If you would invest 20,877 in Dodge Cox Stock on September 3, 2024 and sell it today you would earn a total of 7,928 from holding Dodge Cox Stock or generate 37.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Bond Fund Of
Performance |
| Timeline |
| Dodge Cox Stock |
| Bond Fund |
Dodge Cox and Bond Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Bond Fund
The main advantage of trading using opposite Dodge Cox and Bond Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Bond Fund 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 Bond Fund will offset losses from the drop in Bond Fund's long position.| Dodge Cox vs. Tekla Healthcare Opportunities | Dodge Cox vs. Health Biotchnology Portfolio | Dodge Cox vs. Eventide Healthcare Life | Dodge Cox vs. Lord Abbett Health |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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