Correlation Between Dodge Cox and Payden Equity
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Payden Equity 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 Payden Equity 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 Payden Equity Income, you can compare the effects of market volatilities on Dodge Cox and Payden Equity 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 Payden Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Payden Equity.
Diversification Opportunities for Dodge Cox and Payden Equity
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dodge and Payden is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Payden Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Equity Income 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 Payden Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Equity Income has no effect on the direction of Dodge Cox i.e., Dodge Cox and Payden Equity go up and down completely randomly.
Pair Corralation between Dodge Cox and Payden Equity
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 0.84 times more return on investment than Payden Equity. However, Dodge Cox Stock is 1.19 times less risky than Payden Equity. It trades about 0.09 of its potential returns per unit of risk. Payden Equity Income is currently generating about 0.03 per unit of risk. If you would invest 19,640 in Dodge Cox Stock on November 27, 2024 and sell it today you would earn a total of 7,623 from holding Dodge Cox Stock or generate 38.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Payden Equity Income
Performance |
| Timeline |
| Dodge Cox Stock |
| Payden Equity Income |
Dodge Cox and Payden Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Payden Equity
The main advantage of trading using opposite Dodge Cox and Payden Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Payden Equity 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 Payden Equity will offset losses from the drop in Payden Equity's long position.| Dodge Cox vs. T Rowe Price | Dodge Cox vs. Metropolitan West Ultra | Dodge Cox vs. T Rowe Price | Dodge Cox vs. Angel Oak Ultrashort |
| Payden Equity vs. Payden Equity Income | Payden Equity vs. Select Fund R | Payden Equity vs. Select Fund C | Payden Equity vs. Sentinel Mon Stock |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |