Correlation Between Dodge Cox and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Eaton Vance 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 Eaton Vance 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 Eaton Vance Municipal, you can compare the effects of market volatilities on Dodge Cox and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Eaton Vance.
Diversification Opportunities for Dodge Cox and Eaton Vance
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dodge and Eaton is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Eaton Vance Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Municipal 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Municipal has no effect on the direction of Dodge Cox i.e., Dodge Cox and Eaton Vance go up and down completely randomly.
Pair Corralation between Dodge Cox and Eaton Vance
Assuming the 90 days horizon Dodge Cox Stock is expected to under-perform the Eaton Vance. In addition to that, Dodge Cox is 3.57 times more volatile than Eaton Vance Municipal. It trades about -0.17 of its total potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.39 per unit of volatility. If you would invest 1,138 in Eaton Vance Municipal on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Eaton Vance Municipal or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Eaton Vance Municipal
Performance |
| Timeline |
| Dodge Cox Stock |
| Eaton Vance Municipal |
Dodge Cox and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Eaton Vance
The main advantage of trading using opposite Dodge Cox and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Dodge Cox vs. Morningstar Unconstrained Allocation | Dodge Cox vs. Aqr Large Cap | Dodge Cox vs. Fisher Large Cap |
| Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Mbf |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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