Correlation Between Dodge Cox and Huber Capital
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Huber Capital 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 Huber Capital 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 Huber Capital Equity, you can compare the effects of market volatilities on Dodge Cox and Huber Capital 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 Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Huber Capital.
Diversification Opportunities for Dodge Cox and Huber Capital
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dodge and Huber is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Huber Capital Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital 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 Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Equity has no effect on the direction of Dodge Cox i.e., Dodge Cox and Huber Capital go up and down completely randomly.
Pair Corralation between Dodge Cox and Huber Capital
Assuming the 90 days horizon Dodge Cox Stock is expected to under-perform the Huber Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dodge Cox Stock is 1.36 times less risky than Huber Capital. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Huber Capital Equity is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 3,441 in Huber Capital Equity on September 13, 2024 and sell it today you would lose (26.00) from holding Huber Capital Equity or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Huber Capital Equity
Performance |
| Timeline |
| Dodge Cox Stock |
| Huber Capital Equity |
Dodge Cox and Huber Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Huber Capital
The main advantage of trading using opposite Dodge Cox and Huber Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Huber Capital 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 Huber Capital will offset losses from the drop in Huber Capital's long position.| Dodge Cox vs. Morningstar Unconstrained Allocation | Dodge Cox vs. Aqr Large Cap | Dodge Cox vs. Fisher Large Cap |
| Huber Capital vs. Huber Capital Equity | Huber Capital vs. Huber Capital Small | Huber Capital vs. Huber Capital Small | Huber Capital vs. Amg Gwk Small |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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