Correlation Between Dodge Cox and Nationwide Bailard
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Nationwide Bailard 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 Nationwide Bailard 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 Nationwide Bailard International, you can compare the effects of market volatilities on Dodge Cox and Nationwide Bailard 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 Nationwide Bailard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Nationwide Bailard.
Diversification Opportunities for Dodge Cox and Nationwide Bailard
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dodge and Nationwide is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Nationwide Bailard Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Bailard 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 Nationwide Bailard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Bailard has no effect on the direction of Dodge Cox i.e., Dodge Cox and Nationwide Bailard go up and down completely randomly.
Pair Corralation between Dodge Cox and Nationwide Bailard
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 0.8 times more return on investment than Nationwide Bailard. However, Dodge Cox Stock is 1.25 times less risky than Nationwide Bailard. It trades about 0.14 of its potential returns per unit of risk. Nationwide Bailard International is currently generating about 0.0 per unit of risk. If you would invest 25,399 in Dodge Cox Stock on September 1, 2024 and sell it today you would earn a total of 3,336 from holding Dodge Cox Stock or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Dodge Cox Stock vs. Nationwide Bailard Internation
Performance |
| Timeline |
| Dodge Cox Stock |
| Nationwide Bailard |
Dodge Cox and Nationwide Bailard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Nationwide Bailard
The main advantage of trading using opposite Dodge Cox and Nationwide Bailard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Nationwide Bailard 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 Nationwide Bailard will offset losses from the drop in Nationwide Bailard's long position.| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Balanced Fund |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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