Correlation Between Dodge Cox and Guidestone Value
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Guidestone Value 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 Guidestone Value 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 Guidestone Value Equity, you can compare the effects of market volatilities on Dodge Cox and Guidestone Value 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 Guidestone Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Guidestone Value.
Diversification Opportunities for Dodge Cox and Guidestone Value
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dodge and Guidestone is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Guidestone Value Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidestone Value Equity 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 Guidestone Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidestone Value Equity has no effect on the direction of Dodge Cox i.e., Dodge Cox and Guidestone Value go up and down completely randomly.
Pair Corralation between Dodge Cox and Guidestone Value
Assuming the 90 days horizon Dodge Cox is expected to generate 1.23 times less return on investment than Guidestone Value. In addition to that, Dodge Cox is 1.08 times more volatile than Guidestone Value Equity. It trades about 0.29 of its total potential returns per unit of risk. Guidestone Value Equity is currently generating about 0.38 per unit of volatility. If you would invest 1,232 in Guidestone Value Equity on September 3, 2024 and sell it today you would earn a total of 78.00 from holding Guidestone Value Equity or generate 6.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Guidestone Value Equity
Performance |
| Timeline |
| Dodge Cox Stock |
| Guidestone Value Equity |
Dodge Cox and Guidestone Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Guidestone Value
The main advantage of trading using opposite Dodge Cox and Guidestone Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Guidestone Value 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 Guidestone Value will offset losses from the drop in Guidestone Value's long position.| Dodge Cox vs. Tekla Healthcare Opportunities | Dodge Cox vs. Health Biotchnology Portfolio | Dodge Cox vs. Eventide Healthcare Life | Dodge Cox vs. Lord Abbett Health |
| Guidestone Value vs. Vanguard Value Index | Guidestone Value vs. Dodge Cox Stock | Guidestone Value vs. American Funds American | Guidestone Value vs. American Funds American |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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