Correlation Between Dodge Cox and Fmasx
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Fmasx 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 Fmasx 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 Fmasx, you can compare the effects of market volatilities on Dodge Cox and Fmasx 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 Fmasx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Fmasx.
Diversification Opportunities for Dodge Cox and Fmasx
Very poor diversification
The 3 months correlation between Dodge and Fmasx is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Fmasx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fmasx 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 Fmasx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fmasx has no effect on the direction of Dodge Cox i.e., Dodge Cox and Fmasx go up and down completely randomly.
Pair Corralation between Dodge Cox and Fmasx
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 0.7 times more return on investment than Fmasx. However, Dodge Cox Stock is 1.44 times less risky than Fmasx. It trades about 0.08 of its potential returns per unit of risk. Fmasx is currently generating about 0.0 per unit of risk. If you would invest 20,373 in Dodge Cox Stock on November 1, 2024 and sell it today you would earn a total of 6,871 from holding Dodge Cox Stock or generate 33.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 15.01% |
| Values | Daily Returns |
Dodge Cox Stock vs. Fmasx
Performance |
| Timeline |
| Dodge Cox Stock |
| Fmasx |
Dodge Cox and Fmasx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Fmasx
The main advantage of trading using opposite Dodge Cox and Fmasx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Fmasx 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 Fmasx will offset losses from the drop in Fmasx's long position.| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Balanced Fund |
| Fmasx vs. Gabelli Convertible And | Fmasx vs. Allianzgi Convertible Income | Fmasx vs. Absolute Convertible Arbitrage | Fmasx vs. Allianzgi Convertible 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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