Correlation Between Dodge Cox and Lazard Sustainable
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Lazard Sustainable 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 Lazard Sustainable 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 Lazard Sustainable Equity, you can compare the effects of market volatilities on Dodge Cox and Lazard Sustainable 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 Lazard Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Lazard Sustainable.
Diversification Opportunities for Dodge Cox and Lazard Sustainable
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dodge and Lazard is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Lazard Sustainable Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Sustainable Equity 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 Lazard Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Sustainable Equity has no effect on the direction of Dodge Cox i.e., Dodge Cox and Lazard Sustainable go up and down completely randomly.
Pair Corralation between Dodge Cox and Lazard Sustainable
Assuming the 90 days horizon Dodge Cox Stock is expected to under-perform the Lazard Sustainable. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dodge Cox Stock is 1.28 times less risky than Lazard Sustainable. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Lazard Sustainable Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,526 in Lazard Sustainable Equity on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Lazard Sustainable Equity or generate 0.85% 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. Lazard Sustainable Equity
Performance |
| Timeline |
| Dodge Cox Stock |
| Lazard Sustainable Equity |
Dodge Cox and Lazard Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Lazard Sustainable
The main advantage of trading using opposite Dodge Cox and Lazard Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Lazard Sustainable 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 Lazard Sustainable will offset losses from the drop in Lazard Sustainable'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 |
| Lazard Sustainable vs. Vy Goldman Sachs | Lazard Sustainable vs. Sprott Gold Equity | Lazard Sustainable vs. Invesco Gold Special | Lazard Sustainable vs. Great West Goldman Sachs |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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