Correlation Between Dodge Cox and Leuthold Core
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Leuthold Core 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 Leuthold Core 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 Leuthold E Investment, you can compare the effects of market volatilities on Dodge Cox and Leuthold Core 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 Leuthold Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Leuthold Core.
Diversification Opportunities for Dodge Cox and Leuthold Core
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Leuthold is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Leuthold E Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leuthold E Investment 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 Leuthold Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leuthold E Investment has no effect on the direction of Dodge Cox i.e., Dodge Cox and Leuthold Core go up and down completely randomly.
Pair Corralation between Dodge Cox and Leuthold Core
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 1.29 times more return on investment than Leuthold Core. However, Dodge Cox is 1.29 times more volatile than Leuthold E Investment. It trades about -0.08 of its potential returns per unit of risk. Leuthold E Investment is currently generating about -0.32 per unit of risk. If you would invest 27,118 in Dodge Cox Stock on December 4, 2024 and sell it today you would lose (344.00) from holding Dodge Cox Stock or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Leuthold E Investment
Performance |
| Timeline |
| Dodge Cox Stock |
| Leuthold E Investment |
Dodge Cox and Leuthold Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Leuthold Core
The main advantage of trading using opposite Dodge Cox and Leuthold Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Leuthold Core 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 Leuthold Core will offset losses from the drop in Leuthold Core's long position.| Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Crossmark Steward Equity | Dodge Cox vs. Nationwide E Plus | Dodge Cox vs. Scharf Global Opportunity |
| Leuthold Core vs. Leuthold E Investment | Leuthold Core vs. Leuthold Select Industries | Leuthold Core vs. Hotchkis Wiley Small | Leuthold Core vs. Calvert Moderate Allocation |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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