Correlation Between Dodge Cox and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Lord Abbett 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 Lord Abbett 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 Lord Abbett Global, you can compare the effects of market volatilities on Dodge Cox and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Lord Abbett.
Diversification Opportunities for Dodge Cox and Lord Abbett
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dodge and Lord is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Lord Abbett Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Global 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Global has no effect on the direction of Dodge Cox i.e., Dodge Cox and Lord Abbett go up and down completely randomly.
Pair Corralation between Dodge Cox and Lord Abbett
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 0.81 times more return on investment than Lord Abbett. However, Dodge Cox Stock is 1.24 times less risky than Lord Abbett. It trades about 0.13 of its potential returns per unit of risk. Lord Abbett Global is currently generating about 0.06 per unit of risk. If you would invest 25,556 in Dodge Cox Stock on August 29, 2024 and sell it today you would earn a total of 3,100 from holding Dodge Cox Stock or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Lord Abbett Global
Performance |
| Timeline |
| Dodge Cox Stock |
| Lord Abbett Global |
Dodge Cox and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Lord Abbett
The main advantage of trading using opposite Dodge Cox and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Dodge Cox vs. Value Fund Investor | Dodge Cox vs. HUMANA INC | Dodge Cox vs. Aquagold International | Dodge Cox vs. Barloworld Ltd ADR |
| Lord Abbett vs. Commonwealth Australianew Zealand | Lord Abbett vs. Commonwealth Japan Fund | Lord Abbett vs. Commonwealth Real Estate | Lord Abbett vs. HUMANA INC |
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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