Correlation Between Fidelity Contrafund and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Fidelity Contrafund 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 Fidelity Contrafund and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Contrafund and Dodge Balanced Fund, you can compare the effects of market volatilities on Fidelity Contrafund 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 Fidelity Contrafund with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Contrafund and Dodge Cox.
Diversification Opportunities for Fidelity Contrafund and Dodge Cox
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Dodge is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Contrafund and Dodge Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Balanced and Fidelity Contrafund 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 Fidelity Contrafund 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 Balanced has no effect on the direction of Fidelity Contrafund i.e., Fidelity Contrafund and Dodge Cox go up and down completely randomly.
Pair Corralation between Fidelity Contrafund and Dodge Cox
Assuming the 90 days horizon Fidelity Contrafund is expected to generate 2.21 times more return on investment than Dodge Cox. However, Fidelity Contrafund is 2.21 times more volatile than Dodge Balanced Fund. It trades about 0.07 of its potential returns per unit of risk. Dodge Balanced Fund is currently generating about 0.16 per unit of risk. If you would invest 2,149 in Fidelity Contrafund on August 27, 2024 and sell it today you would earn a total of 32.00 from holding Fidelity Contrafund or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Contrafund vs. Dodge Balanced Fund
Performance |
| Timeline |
| Fidelity Contrafund |
| Dodge Balanced |
Fidelity Contrafund and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Contrafund and Dodge Cox
The main advantage of trading using opposite Fidelity Contrafund and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Contrafund 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.| Fidelity Contrafund vs. Fidelity Low Priced Stock | Fidelity Contrafund vs. Fidelity Growth Pany | Fidelity Contrafund vs. Fidelity Magellan Fund | Fidelity Contrafund vs. Fidelity Diversified International |
| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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