Correlation Between Voya Index and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Voya Index 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 Voya Index and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Solution and Dodge International Stock, you can compare the effects of market volatilities on Voya Index 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 Voya Index with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Dodge Cox.
Diversification Opportunities for Voya Index and Dodge Cox
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Voya and Dodge is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Dodge International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge International Stock and Voya Index 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 Voya Index Solution 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 International Stock has no effect on the direction of Voya Index i.e., Voya Index and Dodge Cox go up and down completely randomly.
Pair Corralation between Voya Index and Dodge Cox
Assuming the 90 days horizon Voya Index Solution is expected to generate 0.71 times more return on investment than Dodge Cox. However, Voya Index Solution is 1.42 times less risky than Dodge Cox. It trades about 0.12 of its potential returns per unit of risk. Dodge International Stock is currently generating about -0.19 per unit of risk. If you would invest 1,231 in Voya Index Solution on August 30, 2024 and sell it today you would earn a total of 16.00 from holding Voya Index Solution or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Index Solution vs. Dodge International Stock
Performance |
| Timeline |
| Voya Index Solution |
| Dodge International Stock |
Voya Index and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Dodge Cox
The main advantage of trading using opposite Voya Index and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index 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.| Voya Index vs. Dodge International Stock | Voya Index vs. Dreyfusstandish Global Fixed | Voya Index vs. Locorr Dynamic Equity | Voya Index vs. Ultra Short Fixed Income |
| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. The Fairholme Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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