Correlation Between Guidepath(r) Managed and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed 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 Guidepath(r) Managed and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidepath Managed Futures and Dodge Global Bond, you can compare the effects of market volatilities on Guidepath(r) Managed 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 Guidepath(r) Managed with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Dodge Cox.
Diversification Opportunities for Guidepath(r) Managed and Dodge Cox
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guidepath(r) and Dodge is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Dodge Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Global Bond and Guidepath(r) Managed 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 Guidepath Managed Futures 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 Bond has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Dodge Cox go up and down completely randomly.
Pair Corralation between Guidepath(r) Managed and Dodge Cox
Assuming the 90 days horizon Guidepath Managed Futures is expected to generate 1.74 times more return on investment than Dodge Cox. However, Guidepath(r) Managed is 1.74 times more volatile than Dodge Global Bond. It trades about 0.03 of its potential returns per unit of risk. Dodge Global Bond is currently generating about 0.05 per unit of risk. If you would invest 779.00 in Guidepath Managed Futures on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Guidepath Managed Futures or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidepath Managed Futures vs. Dodge Global Bond
Performance |
| Timeline |
| Guidepath Managed Futures |
| Dodge Global Bond |
Guidepath(r) Managed and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidepath(r) Managed and Dodge Cox
The main advantage of trading using opposite Guidepath(r) Managed and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath(r) Managed 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.| Guidepath(r) Managed vs. Pioneer High Yield | Guidepath(r) Managed vs. Legg Mason Partners | Guidepath(r) Managed vs. Valic Company I | Guidepath(r) Managed vs. Siit High Yield |
| Dodge Cox vs. Templeton Global Bond | Dodge Cox vs. Capital World Bond | Dodge Cox vs. Capital World Bond | Dodge Cox vs. Capital World Bond |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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