Correlation Between Dodge Cox and Fidelity Japan
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Fidelity Japan 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 Japan 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 Japan Fund, you can compare the effects of market volatilities on Dodge Cox and Fidelity Japan 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 Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Fidelity Japan.
Diversification Opportunities for Dodge Cox and Fidelity Japan
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and Fidelity is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Fidelity Japan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Japan 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 Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Japan has no effect on the direction of Dodge Cox i.e., Dodge Cox and Fidelity Japan go up and down completely randomly.
Pair Corralation between Dodge Cox and Fidelity Japan
Assuming the 90 days horizon Dodge Cox is expected to generate 1.41 times less return on investment than Fidelity Japan. But when comparing it to its historical volatility, Dodge Cox Stock is 1.4 times less risky than Fidelity Japan. It trades about 0.05 of its potential returns per unit of risk. Fidelity Japan Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,636 in Fidelity Japan Fund on December 4, 2024 and sell it today you would earn a total of 15.00 from holding Fidelity Japan Fund or generate 0.92% 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. Fidelity Japan Fund
Performance |
| Timeline |
| Dodge Cox Stock |
| Fidelity Japan |
Dodge Cox and Fidelity Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Fidelity Japan
The main advantage of trading using opposite Dodge Cox and Fidelity Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Fidelity Japan 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 Japan will offset losses from the drop in Fidelity Japan's long position.| Dodge Cox vs. Dunham Large Cap | Dodge Cox vs. Lord Abbett Affiliated | Dodge Cox vs. Profunds Large Cap Growth | Dodge Cox vs. Jpmorgan Large Cap |
| Fidelity Japan vs. Fidelity Freedom 2015 | Fidelity Japan vs. Fidelity Puritan Fund | Fidelity Japan vs. Fidelity Puritan Fund | Fidelity Japan vs. Fidelity Pennsylvania Municipal |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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