Correlation Between Dodge Cox and Guggenheim Small
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Guggenheim Small 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 Guggenheim Small 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 Guggenheim Small Cap, you can compare the effects of market volatilities on Dodge Cox and Guggenheim Small 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 Guggenheim Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Guggenheim Small.
Diversification Opportunities for Dodge Cox and Guggenheim Small
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dodge and Guggenheim is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Guggenheim Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Small Cap 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 Guggenheim Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Small Cap has no effect on the direction of Dodge Cox i.e., Dodge Cox and Guggenheim Small go up and down completely randomly.
Pair Corralation between Dodge Cox and Guggenheim Small
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 0.71 times more return on investment than Guggenheim Small. However, Dodge Cox Stock is 1.4 times less risky than Guggenheim Small. It trades about 0.12 of its potential returns per unit of risk. Guggenheim Small Cap is currently generating about 0.02 per unit of risk. If you would invest 23,313 in Dodge Cox Stock on September 12, 2024 and sell it today you would earn a total of 4,749 from holding Dodge Cox Stock or generate 20.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.23% |
| Values | Daily Returns |
Dodge Cox Stock vs. Guggenheim Small Cap
Performance |
| Timeline |
| Dodge Cox Stock |
| Guggenheim Small Cap |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dodge Cox and Guggenheim Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Guggenheim Small
The main advantage of trading using opposite Dodge Cox and Guggenheim Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Guggenheim Small 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 Guggenheim Small will offset losses from the drop in Guggenheim Small's long position.| Dodge Cox vs. Needham Aggressive Growth | Dodge Cox vs. Alliancebernstein Global High | Dodge Cox vs. Ppm High Yield | Dodge Cox vs. Siit High Yield |
| Guggenheim Small vs. Fidelity Series 1000 | Guggenheim Small vs. Dodge Cox Stock | Guggenheim Small vs. Jhancock Disciplined Value | Guggenheim Small vs. Cb Large Cap |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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