Correlation Between Dodge Cox and Hussman Strategic
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Hussman Strategic 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 Hussman Strategic 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 Hussman Strategic Dividend, you can compare the effects of market volatilities on Dodge Cox and Hussman Strategic 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 Hussman Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Hussman Strategic.
Diversification Opportunities for Dodge Cox and Hussman Strategic
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dodge and Hussman is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Hussman Strategic Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hussman Strategic 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 Hussman Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hussman Strategic has no effect on the direction of Dodge Cox i.e., Dodge Cox and Hussman Strategic go up and down completely randomly.
Pair Corralation between Dodge Cox and Hussman Strategic
Assuming the 90 days horizon Dodge Cox Stock is expected to under-perform the Hussman Strategic. In addition to that, Dodge Cox is 8.13 times more volatile than Hussman Strategic Dividend. It trades about -0.17 of its total potential returns per unit of risk. Hussman Strategic Dividend is currently generating about 0.44 per unit of volatility. If you would invest 957.00 in Hussman Strategic Dividend on September 13, 2024 and sell it today you would earn a total of 5.00 from holding Hussman Strategic Dividend or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Hussman Strategic Dividend
Performance |
| Timeline |
| Dodge Cox Stock |
| Hussman Strategic |
Dodge Cox and Hussman Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Hussman Strategic
The main advantage of trading using opposite Dodge Cox and Hussman Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Hussman Strategic 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 Hussman Strategic will offset losses from the drop in Hussman Strategic's long position.| Dodge Cox vs. Morningstar Unconstrained Allocation | Dodge Cox vs. Aqr Large Cap | Dodge Cox vs. Fisher Large Cap |
| Hussman Strategic vs. Hussman Strategic Allocation | Hussman Strategic vs. Hussman Strategic Growth | Hussman Strategic vs. Hussman Strategic Total | Hussman Strategic vs. Money Market Obligations |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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