Correlation Between Dodge Cox and Fidelity Canada
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Fidelity Canada 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 Fidelity Canada 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 Fidelity Canada Fund, you can compare the effects of market volatilities on Dodge Cox and Fidelity Canada 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 Fidelity Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Fidelity Canada.
Diversification Opportunities for Dodge Cox and Fidelity Canada
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Fidelity is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Fidelity Canada Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canada 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 Fidelity Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canada has no effect on the direction of Dodge Cox i.e., Dodge Cox and Fidelity Canada go up and down completely randomly.
Pair Corralation between Dodge Cox and Fidelity Canada
Assuming the 90 days horizon Dodge Cox Stock is expected to under-perform the Fidelity Canada. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dodge Cox Stock is 1.32 times less risky than Fidelity Canada. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Fidelity Canada Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,302 in Fidelity Canada Fund on September 13, 2024 and sell it today you would earn a total of 43.00 from holding Fidelity Canada Fund or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Fidelity Canada Fund
Performance |
| Timeline |
| Dodge Cox Stock |
| Fidelity Canada |
Dodge Cox and Fidelity Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Fidelity Canada
The main advantage of trading using opposite Dodge Cox and Fidelity Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Fidelity Canada 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 Fidelity Canada will offset losses from the drop in Fidelity Canada's long position.| Dodge Cox vs. Morningstar Unconstrained Allocation | Dodge Cox vs. Aqr Large Cap | Dodge Cox vs. Fisher Large Cap |
| Fidelity Canada vs. Materials Portfolio Fidelity | Fidelity Canada vs. Ab Value Fund | Fidelity Canada vs. Rbb Fund | Fidelity Canada vs. Volumetric Fund Volumetric |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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