Correlation Between Dodge Cox and Dodge Global
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Dodge Global 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 Dodge Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Cox Global and Dodge Global Stock, you can compare the effects of market volatilities on Dodge Cox and Dodge Global 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 Dodge Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Dodge Global.
Diversification Opportunities for Dodge Cox and Dodge Global
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Dodge and Dodge is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Global and Dodge Global Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Global Stock 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 Global are associated (or correlated) with Dodge Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Global Stock has no effect on the direction of Dodge Cox i.e., Dodge Cox and Dodge Global go up and down completely randomly.
Pair Corralation between Dodge Cox and Dodge Global
Assuming the 90 days horizon Dodge Cox Global is expected to generate about the same return on investment as Dodge Global Stock. But, Dodge Cox Global is 1.0 times less risky than Dodge Global. It trades about -0.12 of its potential returns per unit of risk. Dodge Global Stock is currently generating about -0.12 per unit of risk. If you would invest 1,620 in Dodge Global Stock on November 4, 2024 and sell it today you would lose (175.00) from holding Dodge Global Stock or give up 10.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Global vs. Dodge Global Stock
Performance |
| Timeline |
| Dodge Cox Global |
| Dodge Global Stock |
Dodge Cox and Dodge Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Dodge Global
The main advantage of trading using opposite Dodge Cox and Dodge Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Dodge Global 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 Dodge Global will offset losses from the drop in Dodge Global's long position.| Dodge Cox vs. Fidelity Sai Inflationfocused | Dodge Cox vs. Cref Inflation Linked Bond | Dodge Cox vs. Short Duration Inflation | Dodge Cox vs. Guggenheim Managed Futures |
| Dodge Global vs. Federated Government Income | Dodge Global vs. Ishares Municipal Bond | Dodge Global vs. Oklahoma Municipal Fund | Dodge Global vs. Hartford Municipal Short |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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