Correlation Between Dodge Cox and Oakmark Global
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Oakmark 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 Oakmark 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 Oakmark Global Select, you can compare the effects of market volatilities on Dodge Cox and Oakmark 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 Oakmark Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Oakmark Global.
Diversification Opportunities for Dodge Cox and Oakmark Global
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Oakmark is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Global and Oakmark Global Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Global Select 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 Oakmark Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Global Select has no effect on the direction of Dodge Cox i.e., Dodge Cox and Oakmark Global go up and down completely randomly.
Pair Corralation between Dodge Cox and Oakmark Global
Assuming the 90 days horizon Dodge Cox is expected to generate 2.6 times less return on investment than Oakmark Global. But when comparing it to its historical volatility, Dodge Cox Global is 1.26 times less risky than Oakmark Global. It trades about 0.05 of its potential returns per unit of risk. Oakmark Global Select is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,278 in Oakmark Global Select on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Oakmark Global Select or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dodge Cox Global vs. Oakmark Global Select
Performance |
| Timeline |
| Dodge Cox Global |
| Oakmark Global Select |
Dodge Cox and Oakmark Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Oakmark Global
The main advantage of trading using opposite Dodge Cox and Oakmark Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Oakmark 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 Oakmark Global will offset losses from the drop in Oakmark Global's long position.| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Balanced Fund |
| Oakmark Global vs. Oakmark International Fund | Oakmark Global vs. Oakmark Fund Advisor | Oakmark Global vs. Oakmark Select Fund | Oakmark Global vs. Oakmark Global Select |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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