Correlation Between Dodge Cox and Gmo Global
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Gmo 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 Gmo 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 Gmo Global Equity, you can compare the effects of market volatilities on Dodge Cox and Gmo 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 Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Gmo Global.
Diversification Opportunities for Dodge Cox and Gmo Global
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and GMO is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Global and Gmo Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Global 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 Global are associated (or correlated) with Gmo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Global Equity has no effect on the direction of Dodge Cox i.e., Dodge Cox and Gmo Global go up and down completely randomly.
Pair Corralation between Dodge Cox and Gmo Global
Assuming the 90 days horizon Dodge Cox Global is expected to generate 0.35 times more return on investment than Gmo Global. However, Dodge Cox Global is 2.88 times less risky than Gmo Global. It trades about 0.26 of its potential returns per unit of risk. Gmo Global Equity is currently generating about 0.08 per unit of risk. If you would invest 1,383 in Dodge Cox Global on October 25, 2024 and sell it today you would earn a total of 43.00 from holding Dodge Cox Global or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Dodge Cox Global vs. Gmo Global Equity
Performance |
| Timeline |
| Dodge Cox Global |
| Gmo Global Equity |
Dodge Cox and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Gmo Global
The main advantage of trading using opposite Dodge Cox and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Gmo 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 Gmo Global will offset losses from the drop in Gmo Global's long position.| Dodge Cox vs. Oklahoma College Savings | Dodge Cox vs. Schwab Small Cap Index | Dodge Cox vs. Vy T Rowe | Dodge Cox vs. Global Diversified Income |
| Gmo Global vs. Franklin Mutual Global | Gmo Global vs. Franklin Mutual Global | Gmo Global vs. Dodge Cox Global | Gmo Global vs. Dodge Global 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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