Correlation Between Dodge Cox and Federated Corporate
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Federated Corporate 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 Federated Corporate 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 Federated Porate Bond, you can compare the effects of market volatilities on Dodge Cox and Federated Corporate 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 Federated Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Federated Corporate.
Diversification Opportunities for Dodge Cox and Federated Corporate
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dodge and Federated is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Federated Porate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Porate Bond 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 Federated Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Porate Bond has no effect on the direction of Dodge Cox i.e., Dodge Cox and Federated Corporate go up and down completely randomly.
Pair Corralation between Dodge Cox and Federated Corporate
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 1.77 times more return on investment than Federated Corporate. However, Dodge Cox is 1.77 times more volatile than Federated Porate Bond. It trades about 0.1 of its potential returns per unit of risk. Federated Porate Bond is currently generating about 0.05 per unit of risk. If you would invest 19,961 in Dodge Cox Stock on September 5, 2024 and sell it today you would earn a total of 8,844 from holding Dodge Cox Stock or generate 44.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dodge Cox Stock vs. Federated Porate Bond
Performance |
| Timeline |
| Dodge Cox Stock |
| Federated Porate Bond |
Dodge Cox and Federated Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Federated Corporate
The main advantage of trading using opposite Dodge Cox and Federated Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Federated Corporate 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 Federated Corporate will offset losses from the drop in Federated Corporate's long position.| Dodge Cox vs. Fisher Small Cap | Dodge Cox vs. Ab Small Cap | Dodge Cox vs. Ab Small Cap | Dodge Cox vs. Ancorathelen Small Mid Cap |
| Federated Corporate vs. Federated Emerging Market | Federated Corporate vs. Federated Mdt All | Federated Corporate vs. Federated Mdt Balanced | Federated Corporate vs. Federated Global Allocation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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