Correlation Between Cullen Enhanced and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Cullen Enhanced and Dodge Cox 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 Cullen Enhanced and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullen Enhanced Equity and Dodge Global Stock, you can compare the effects of market volatilities on Cullen Enhanced and Dodge Cox 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 Cullen Enhanced with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen Enhanced and Dodge Cox.
Diversification Opportunities for Cullen Enhanced and Dodge Cox
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cullen and Dodge is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Enhanced Equity 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 Cullen Enhanced 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 Cullen Enhanced Equity are associated (or correlated) with Dodge Cox. 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 Cullen Enhanced i.e., Cullen Enhanced and Dodge Cox go up and down completely randomly.
Pair Corralation between Cullen Enhanced and Dodge Cox
Assuming the 90 days horizon Cullen Enhanced Equity is expected to generate 0.62 times more return on investment than Dodge Cox. However, Cullen Enhanced Equity is 1.62 times less risky than Dodge Cox. It trades about 0.09 of its potential returns per unit of risk. Dodge Global Stock is currently generating about 0.04 per unit of risk. If you would invest 906.00 in Cullen Enhanced Equity on November 28, 2024 and sell it today you would earn a total of 165.00 from holding Cullen Enhanced Equity or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.69% |
| Values | Daily Returns |
Cullen Enhanced Equity vs. Dodge Global Stock
Performance |
| Timeline |
| Cullen Enhanced Equity |
| Dodge Global Stock |
Cullen Enhanced and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen Enhanced and Dodge Cox
The main advantage of trading using opposite Cullen Enhanced and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Enhanced position performs unexpectedly, Dodge Cox 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 Cox will offset losses from the drop in Dodge Cox's long position.| Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Value Fund |
| Dodge Cox vs. Small Pany Growth | Dodge Cox vs. Federated Government Income | Dodge Cox vs. Gmo Quality Fund | Dodge Cox vs. Versatile Bond Portfolio |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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