Correlation Between Dodge Cox and Oshaughnessy Market
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Oshaughnessy Market 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 Oshaughnessy Market 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 Oshaughnessy Market Leaders, you can compare the effects of market volatilities on Dodge Cox and Oshaughnessy Market 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 Oshaughnessy Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Oshaughnessy Market.
Diversification Opportunities for Dodge Cox and Oshaughnessy Market
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dodge and Oshaughnessy is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Oshaughnessy Market Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshaughnessy Market 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 Oshaughnessy Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshaughnessy Market has no effect on the direction of Dodge Cox i.e., Dodge Cox and Oshaughnessy Market go up and down completely randomly.
Pair Corralation between Dodge Cox and Oshaughnessy Market
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 0.79 times more return on investment than Oshaughnessy Market. However, Dodge Cox Stock is 1.27 times less risky than Oshaughnessy Market. It trades about 0.44 of its potential returns per unit of risk. Oshaughnessy Market Leaders is currently generating about 0.27 per unit of risk. If you would invest 25,713 in Dodge Cox Stock on November 3, 2024 and sell it today you would earn a total of 1,591 from holding Dodge Cox Stock or generate 6.19% 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. Oshaughnessy Market Leaders
Performance |
| Timeline |
| Dodge Cox Stock |
| Oshaughnessy Market |
Dodge Cox and Oshaughnessy Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Oshaughnessy Market
The main advantage of trading using opposite Dodge Cox and Oshaughnessy Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Oshaughnessy Market 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 Oshaughnessy Market will offset losses from the drop in Oshaughnessy Market's long position.| Dodge Cox vs. Ab Bond Inflation | Dodge Cox vs. Ab Bond Inflation | Dodge Cox vs. Ab Bond Inflation | Dodge Cox vs. Asg Managed Futures |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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