Correlation Between Dodge Cox and Day Hagan
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Day Hagan 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 Day Hagan 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 Day Hagan Tactical, you can compare the effects of market volatilities on Dodge Cox and Day Hagan 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 Day Hagan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Day Hagan.
Diversification Opportunities for Dodge Cox and Day Hagan
Average diversification
The 3 months correlation between Dodge and Day is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Day Hagan Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Day Hagan Tactical 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 Day Hagan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Day Hagan Tactical has no effect on the direction of Dodge Cox i.e., Dodge Cox and Day Hagan go up and down completely randomly.
Pair Corralation between Dodge Cox and Day Hagan
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 0.96 times more return on investment than Day Hagan. However, Dodge Cox Stock is 1.04 times less risky than Day Hagan. It trades about 0.09 of its potential returns per unit of risk. Day Hagan Tactical is currently generating about 0.07 per unit of risk. If you would invest 19,823 in Dodge Cox Stock on September 12, 2024 and sell it today you would earn a total of 8,307 from holding Dodge Cox Stock or generate 41.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 29.35% |
| Values | Daily Returns |
Dodge Cox Stock vs. Day Hagan Tactical
Performance |
| Timeline |
| Dodge Cox Stock |
| Day Hagan Tactical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dodge Cox and Day Hagan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Day Hagan
The main advantage of trading using opposite Dodge Cox and Day Hagan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Day Hagan 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 Day Hagan will offset losses from the drop in Day Hagan's long position.| Dodge Cox vs. Needham Aggressive Growth | Dodge Cox vs. Alliancebernstein Global High | Dodge Cox vs. Ppm High Yield | Dodge Cox vs. Siit High Yield |
| Day Hagan vs. Jhancock Disciplined Value | Day Hagan vs. Washington Mutual Investors | Day Hagan vs. Dodge Cox Stock | Day Hagan vs. Aqr Large Cap |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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