Correlation Between Dodge Cox and Frost Kempner
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Frost Kempner 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 Frost Kempner 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 Frost Kempner Multi Cap, you can compare the effects of market volatilities on Dodge Cox and Frost Kempner 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 Frost Kempner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Frost Kempner.
Diversification Opportunities for Dodge Cox and Frost Kempner
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and Frost is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Frost Kempner Multi Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Kempner Multi 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 Frost Kempner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Kempner Multi has no effect on the direction of Dodge Cox i.e., Dodge Cox and Frost Kempner go up and down completely randomly.
Pair Corralation between Dodge Cox and Frost Kempner
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 1.0 times more return on investment than Frost Kempner. However, Dodge Cox Stock is 1.0 times less risky than Frost Kempner. It trades about 0.51 of its potential returns per unit of risk. Frost Kempner Multi Cap is currently generating about 0.37 per unit of risk. If you would invest 25,713 in Dodge Cox Stock on November 2, 2024 and sell it today you would earn a total of 1,690 from holding Dodge Cox Stock or generate 6.57% 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. Frost Kempner Multi Cap
Performance |
| Timeline |
| Dodge Cox Stock |
| Frost Kempner Multi |
Dodge Cox and Frost Kempner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Frost Kempner
The main advantage of trading using opposite Dodge Cox and Frost Kempner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Frost Kempner 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 Frost Kempner will offset losses from the drop in Frost Kempner's long position.| Dodge Cox vs. Financials Ultrasector Profund | Dodge Cox vs. Vanguard Financials Index | Dodge Cox vs. T Rowe Price | Dodge Cox vs. Davis Financial Fund |
| Frost Kempner vs. Calvert Conservative Allocation | Frost Kempner vs. Voya Retirement Servative | Frost Kempner vs. Federated Hermes Conservative | Frost Kempner vs. Guidepath Conservative Income |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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